Western Union, MoneyGram report losses in Q2; WU to reduce headcount by 10%

Alex Holmes, Chairman and CEO, MoneyGram

US-based money transfer firms, Western Union (WU) and MoneyGram International, have both reported revenue losses in the second quarter of 2019.

In the Q2, WU generated revenue of $1.3billion, with a decline of 5% on a reported basis compared to the prior year period while MoneyGram reported a bigger drop in revenue loss of 14% year-over-year, falling to $323.8bn.

MoneyGram also announced a net loss of $27.2 million compared to net income of $2.3mnfor the second quarter of 2018.

On the dip in revenue, Alex Holmes, Chairman and CEO, MoneyGram commented, “Financial results in the second quarter were impacted by slower than anticipated recovery of the US-outbound market along with the continuing market challenges in the US-US business.”

However, the company benefitted from the digital platforms. “Importantly, we reported accelerated growth from our digital platforms and returned to year-over-year growth in many key corridors as we saw a sequential increase in active, returning and new customers, he added.

MoneyGram’s digital revenue accounted for 16% of its total money transfer revenue, as per the report.

Post the results, Western Union announced that the company has already begun the implementation of its new Global Strategy, through a tweet. The strategy is designed to drive improved efficiency, profitability, and long-term revenue growth, WU shared through a release.

The initial implementation includes significant changes to the company’s operating model which will include an expected headcount reduction of approximately 10% and a consolidation of corporate and business offices.

With the strategy, the company expects to generate annual savings of approximately $100mn beginning in 2021, with approximately $50mn anticipated to be delivered in 2020.

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