Tonik Financial Confirms Multiple Layoffs in Bid for Profitability

Tonik Financial, headquartered in Singapore and operating the Tonik Digital Bank in the Philippines, has recently revealed a reduction in its workforce, which the company says is a strategic move towards enhancing revenue streams and attaining profitability.

The decision, as disclosed by founder and CEO Greg Krasnov, involves the retrenchment of select fixed positions deemed non-critical for the company’s forward momentum. Although specific numbers were not provided by Greg, insights from a knowledgeable source revealed to Tech in Asia that the cutbacks had supposedly impacted 80 roles across various departments.

This development follows a period of significant expansion for Tonik, marked by a 201% increase in its consolidated loan portfolio and a 45% rise in staff count in 2023. Furthermore, the company achieved a 33% reduction in net cash burn last year. Despite these growth indicators, Tonik reported total losses amounting to US$37.6 million in 2022, with personnel expenses amounting to US$10.6 million. However, it’s noteworthy that the firm’s net interest income saw a substantial increase, growing 5.7 times over the previous year.

Amid these changes, Greg highlighted the company’s success in reaching unit profitability for its lending products, setting the stage for the pursuit of profitability at the group level. He emphasised the firm’s intention to redirect resources towards directly bolstering growth initiatives, with the anticipation of enhancements in the loan portfolio and revenue generation. This realignment is expected to foster double-digit growth in the company’s workforce by the year’s end.

Greg Krasnov

Since its inception in 2021, Tonik Financial has rapidly expanded its team, reaching nearly 600 employees by January 2023. Reflecting on the challenges and opportunities ahead, Greg remarked,

“Risk is part of our daily business. We need to assess where we can allocate our resources so we minimize the risk and optimize profitability.”

This statement appears to underline the company’s commitment to strategic resource management and profitability optimisation amidst the dynamic and competitive landscape of digital banking.