Powa Technologies, the London-based payment company that fell into administration late last month, fired around 5% of its staff on New Year’s Eve, causing disruption and delays to a project it had just raised $80 million (£57.2 million) for.
Two former Powa employees, who declined to be named, separately raised the New Year’s Eve firings with Business Insider as an example of how bad employee turnover was.
Powa employed 311 staff when it went into administration. An estimated 15 developers working on Powa’s mobile card reader, mPowa, were let ago on December 31, 2014, the sources said. The timing of the firing meant employees were not entitled to any pay in January.
The New Year’s Eve redundancies came just a month after Powa raised $80 million (£57.2 million) from its biggest investor, Wellington Management, to launch its mPowa card reader into the US. The mPowa reader, later called PowaPOS, was built to rival the likes of Square and iZettle.
One former developer who worked closely with engineers made redundant told BI: “That specific case around the firing of people New Year’s Eve, that was pivotal because that project was already years overdue. When you fire a core team like that then obviously that’s going to set you back even further.”
The redundancy round in 2014 is just the most memorable of many, according to several former employees, who say senior management routinely fired groups of staff despite no obvious financial pressure or underperformance.
The developer added: “Redundancies like that were quite common. The next one happened a few months after when I think 20 staff went or something like that. It was absolutely ridiculous.”
The developer said there was “no respect” for engineers, adding: “In many cases when people were made redundant they went on a hiring spree again which made it even worse.” He said people who were made redundant were often scapegoats for missed deadlines due to unrealistic forecasts.
Deloitte, who now act and speak for Powa, declined to comment on the New Year’s Eve redundancies and turnover at the company.
Powa’s founder and CEO Dan Wagner did not respond to emails or calls from Business Insider. When called by Business Insider, Wagner replied over text: “I can’t talk right now.” He did not respond to subsequent texts and calls.
Wellington Management did not respond to an emailed request for comment from BI. We’ll update if we hear back.
A second former sales employee who confirmed the New Year’s Eve firings also told BI that the layoffs delayed projects, as did repeated interventions from senior management.
He said: “Pretty much the whole road map for development, which should be making sure that you can get the client projects that are actually going to drive revenue through the door, would be completely headwinded by decisions at that level [senior management], which makes the projects completely go off track.”
“If you’re not deploying because someone wants to make it look prettier or wants a different UI or wants it to look more seamless, you’re actually letting your customers down. At the end of the day, your customers are paying you.”
He added of the culture of redundancies: “If they [staff] weren’t doing the right things or singing the right songs, they’d pretty much get marched immediately.”
Numerous reviews on anonymous employee feedback site Glassdoor also cite high staff turnover at Powa Technologies as one of the company’s biggest problems. One review writes: “REDUNDANCIES!!! This is kinda a company tradition. Just to warn you, it happens every quarter of the year.”
Powa, once valued at $2.7 billion (£1.9 billion), called in Deloitte as administrators two weeks ago after running out of money. The company has raised at least $225 million (£160.8 million) since 2013 but had just $250,000 (£178,700) in the bank at the start of February, with debts of $16.4 million (£11.7 million). Founder and CEO Dan Wagner told staff the company was “basically pre-revenue”, according to a video seen by the Financial Times.
London-headquartered Powa has three main business lines: PowaWeb, which built online shops for retailers; PowaPOS, formerly known as mPowa, which built a mobile card reader to rival the likes of Square; and PowaTag, an app the would let consumers buy things by scanning QR code, print adverts, and audio of TV ads.
The Financial Times reported on Monday that administrators Deloitte are telling Powa staff that “the former management’s powers have ceased” and warning them not to hand any company property, including computer code, to former management.
It’s not clear whether Powa CEO and founder Dan Wagner is still involved with the company. Deloitte declined to comment on his position and, once again, Wagner could not be reached for comment.