Xero (ASX: XRO), the global small business platform, today announced a strategic partnership with app partner Deputy, the global people platform for hourly work, to deeply embed Deputy’s capability into Xero Payroll for Australian customers, making payroll and workforce management even easier.

Once available, Deputy’s workforce management capability will be deeply integrated into the Xero platform, bringing workforce management together with Xero's payroll and accounting in one place for Xero’s Australian customers. Xero and Deputy will also execute a go-to-market partnership in New Zealand, which includes co-branded marketing efforts.

As part of the strategic partnership with Deputy, Xero will invest USD$25million to take a minority position in Deputy to further increase the two businesses’ focus and alignment.

Xero also confirmed a decision to retire its Planday business in Australia but will continue to focus on Planday’s core business in Europe, including the UK. Planday will continue to support its Australian customers until 30 September 2024, during which time they will have the option to transition their workforce management needs to Xero’s preferred partner, Deputy.

As a result, Xero expects to recognise an immaterial write down in FY25 of previously capitalised costs associated with Australian product development.

Xero CEO Sukhinder Singh Cassidy said: “As part of our focused FY25-27 strategy, Xero continues to optimise how we allocate resources to get the right results for customers, Xero and our stakeholders. As part of our commitment to help small businesses run more effectively, we’re excited to deepen our already strong integration partnership with Deputy to bring their workforce management technology to Xero’s Australian customers, all in one platform.”

“These changes also provide an opportunity for Planday to focus its efforts on its strong core European markets, and maximise subscriber growth and customer value creation opportunities there even further.”

Deputy CEO Silvija Martincevic said: “Deputy is thrilled to announce this transformative strategic partnership with Xero as it connects two industry-leading global companies to offer a seamless all-in-one solution for accounting, payroll, and workforce management. This collaboration reflects our shared dedication to product excellence, innovation, and serving the needs of small businesses. By embedding our platforms through this partnership, we will empower hundreds of thousands of businesses across Australia with the tools they need to thrive in today's dynamic business environment.”