Bill to cut workforce by 6%

Dive Brief:

• Bill Holdings will cut its workforce by 6%, CEO René Lacerte announced in a Wednesday company message to employees. That’s equal to about 140 employees, based on headcount as of the end of June. “After careful consideration, the executive team has made the decision to reduce our workforce by 6%,” Lacerte said in the website post.
• The billing software company also disclosed in a regulatory filing Thursday that it has reached agreement with the investment fund Starboard Value, which disclosed an 8.5% Bill Holdings stake earlier this year, to increase the size of its board to 13 directors, and add two new members proposed by the firm. In addition, the company disclosed that a board director and its chief legal officer are exiting.
• As part of the agreement, Starboard said it would withdraw a September letter to the company in which it nominated its own slate of directors for consideration at the annual meeting and will vote in favor the company’s revised slate of directors.

Dive Insight:

Activist hedge fund Starboard said last month that it planned to nominate a slate of “highly qualified” directors at Bill Holdings to seek changes after it amassed its ownership stake. The San Jose, California-based company that provides bill payments and financial operations software to small and mid-sized businesses.

As part of its regulatory disclosures this week, Bill Holdings said that Stephen Fisher resigned from its board on Oct. 14, and that Peter A.

Feld and Lee Kirkpatrick would join the board under the new Oct. 15 pact with Starboard. As part of the agreement, the investment firm also entered a standstill agreement, with stipulations regarding board replacements, non-disparagement, confidentiality and Starboard’s expense reimbursement.

Another activist investment firm, Elliott Management, also said last month that it had accumulated a 5% ownership stake in Bill Holdings.

Lacerte, who is also the founder of Bill Holdings, was put on the defensive, and tried to defend the company’s performance during an investor conference last month. “The board has always actively thought about shareholder value and how you create more shareholder value,” Lacerte said, adding later in the discussion that “the DNA of the company” is focused on growth and profits.

In a separate regulatory filing earlier this month, on Oct. 8, Bill Holdings disclosed that Chief Legal Officer Raj Aji, who is also its chief compliance officer, took a medical leave from the company as of Oct. 13, and that he intends to retire at some future unspecified date.

The announcement Wednesday that the workforce will be pared also gave some explanation of the company’s reasoning. “We are becoming a more focused and efficient organization, realigning teams around top priorities and improving execution,” Lacerte said in the post. “These efforts have laid important groundwork, but they haven’t yet delivered the level of results necessary to achieve our continuing profitability goals.”

Bill provides its services to about a half million SMBs and 9,000 accountants who manage their money, according to the post.

The company’s focus shifted this year, meaning it had a different relationship with those customers. “Our goal is to shift from doing the work with our customers to doing it for them by anticipating their needs, streamlining financial operations, and helping them grow faster,” Lacerte said.

To bolster the growth goals, the CEO said Bill Holdings has recently expanded embedded payments ties with the companies Oracle NetSuite and Paychex and it also invested in agentic artificial intelligence.

The job cuts are part of the overall restructuring plan.“Reducing our workforce improves organizational agility and efficiency, while also freeing up capital resources to fuel investments that strengthen our market leadership,” Lacerte said.

Bill Holdings reduced its workforce not quite two years ago. In December 2023, the company said it would cut 15% of its headcount, or about 378 workers.