Things have turned messy for Germany's scandal-hit Wirecard as the payments group made more than 50 percent of its remaining staff jobless. It also ended the employment of its entire management board, an official overseer for the company's insolvency said.
Michael Jaffe, the court-appointed administrator for Wirecard, said the company was forced to initiate "deeper cuts" in order to keep its core business alive.
Wirecard said it was keeping 570 employees at its Aschheim headquarters but had to let go of 730 others. A court in Germany has launched insolvency proceedings for the company's assets.
A lack of liquidity has made things very hard for Wirecard - especially in the aftermath of the company's highly publicized scandal, Jaffe said. The normal reorganization and cost-realignment initiatives of the group were not enough, he said.
Wirecard's current supervisory board will now relinquish control of the company while others plan to resign. A representative of the company didn't immediately respond to requests for comment about the status of the board.
Once the "rising star" of Europe's financial technology market - earning a spot among its 30 blue chips - Wirecard declared insolvency in June and declared a debt of almost $4 billion.
Some banks who made loans to the company said they hoped to recover at least a quarter of the almost $2 billion Wirecard owes them.
The company's operations in Brazil have been disposed of as part of the administrator's efforts to recover as much cash as possible to repay lenders.
Prosecutors suspect executives of the credit-card operator were the brains behind a criminal activity to alter the company's ledgers and dupe creditors of billions of euros.
Wirecard's former chief executive and several other high-ranking executives have since been arrested by the German authorities on charges of fraud.
Germany's DAX benchmark gave Wirecard the boot effective Aug. 24 after its stock price fell substantially. Wirecard shares were changing hands for near to 130 euros ($154) each before the scandal emerged.
