FIS to Cut Thousands of Jobs as New CEO Targets Costs

Fidelity National Information Services Inc. plans to dismiss thousands of workers as part of incoming Chief Executive Officer Stephanie Ferris’s strategy to win back investor confidence. The fintech giant has seen its stock price slump by 44% this year, and Ferris is hoping to turn things around.

According to people familiar with the matter, the cuts are expected to be gradual and may affect several thousand staffers and contractors at the payments company. They're part of Ferris's plan to deliver at least $500 million in cost savings in coming quarters.

Ferris, the company’s current president, will become CEO on Jan. 1, taking over from Gary Norcross. The company had more than 65,000 employees at the end of last year.

Ferris told investors earlier this month that the company is focused on permanently reshaping its cost structure through cost-reduction and containment initiatives.

These initiatives include actions to optimize and reduce vendor spend, outsource non-value-added activities, and review and rightsize the current workforce.

A spokesperson for FIS declined to comment on the job cuts. Shares in the company rose more than 4% on Tuesday, trading at $63.83 per share.

FIS has a long history of providing banking and capital-markets technology to thousands of financial institutions. In 2019, the company completed its roughly $42 billion cash-and-stock acquisition of the payments giant Worldpay Inc., giving it a massive foothold in the business known as merchant acquiring. This involves enticing businesses around the world to agree to accept electronic payments.

The unit has faced challenges in recent months, particularly the part of the business focused on sellers in the UK, according to Ferris.

"The economic conditions in the UK are pretty challenging," she said early in November. "And as we look out even over the next 60 days, it's tough to call it. They are in a recession, their consumers are struggling and we are tied to consumer spending."

FIS shares have dropped sharply this year, partly due to concerns about consumer spending. This has wiped almost $30 billion off the company's market capitalization.

The merchant business has long been focused on winning share in physical stores. However, Ferris said this month that the company is now focused on improving its e-commerce business as part of her turnaround efforts.

Despite this, executives have lowered their outlook for both revenue and earnings for the year. Adjusted profit per share is now expected to be as much as $6.66 in 2022, compared with the $7.10 the company had previously forecast.

Ferris said that the enterprise transformation program is designed to improve the company's overall performance, rather than simply cutting costs. He added that the program will focus on all aspects of the company's global operations.