Stricken data replicator WANdisco is chopping around 30 percent of its workforce as part of a restructure following the March discovery that a single salesperson had booked fake orders to inflate revenues for calendar 2022.
The London Stock Exchange-listed business brought in a forensic accountant to review its books, and concluded that audited recognized revenue of $24 million was “false” as were sales bookings of $115.46 million. Instead, sales should have been $9.7 million and bookings some $11.4 million.
Today the business told investors it was reorganizing the business and as a result 30 percent of staff are being chopped. WANdisco said it employed 159 people at the end of 2021 but no more recent figures are available.
The layoffs come in the wake of allegations that one single senior sales employee misrepresented their sales in 2022, according to forensic accountants FRP Advisory brought in by new chairman and interim CEO Ken Lever. The previous chairman and CEO Dave Richards and CFO Erik Miller resigned after the huge and potentially fraudulent sales reporting was discovered, leading the company to suspend its share trading on the UK’s AIM exchange. WANdisco had been flying high after a supposed record 2022 year with talk of seeking a US listing for its shares.
The restructuring confirmed today was expected. Lever said: “Regrettably, the proposed action is a necessary step to responsibly position WANdisco for long-term growth.” There has been a detailed review of the business which signaled a need for difficult but necessary changes to its size, WANdisco said.
Management had to reduce WANdisco’s costs to perhaps demonstrate to investors that it has regained its grip on business controls and can resume share trading.
The proposed restructuring, Lever said, “was considered at great length,” and involves a reorganization and review process covering all areas of its operations and geographic presence. The main offices are in Sheffield, UK, and San Ramon, California. All local laws covering layoffs are being followed and the individuals concerned will be given support, the company said.
Even with the decrease in 2022 revenues to $9.7 million from the prior and false $24 million, WANdisco grew 2022 revenues from the $7.4 million reported in 2021, so there is hope a growing business could emerge from this fiasco.
WANdisco added in its statement to investors that it was continuing to trade normally and is making progress on its objective to lift the suspension of its shares as soon as is practicable.
