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These fintech companies have slashed staff or frozen hiring amid a broader market reckoning.
Last update: June 15, 2022.
In late April, Robinhood slashed 9% of its staff. The discount brokerage’s CEO cited “duplicate roles” for the layoffs, following a year of rapid expansion. It was a harbinger of more cuts to come: Thousands of employees at fintech companies have watched their jobs disappear in the six weeks since.
“Over the last 12 years, many companies really shifted to this ‘growing all costs’ mindset. And to be honest, a lot of the measurements of success have been on employee growth,” explained Richard Cho, Robinhood’s former recruitment head who joined talent acquisition software startup Gem three months ago as chief recruiting officer.
As fintech faces a broader reckoning, companies have already shifted away from rapid-fire hiring. VCs are expecting big returns on the record $132 billion they poured into fintechs in 2021, but most fintechs are still struggling to reach profitability. Valuations have taken a hit. Just weeks before announcing a 10% workforce reduction of its own, buy now, pay later unicorn Klarna reportedly sought new funding at a $30 billion valuation-–a big discount from a prior $46 billion valuation. Another roadblock: Regulators are scrutinizing fintechs with increased vigor, and fraud has impacted Chime, Paypal and even smaller players like HMBradley.
Fintech isn’t alone in seeing such consolidation. Public tech companies like Twitter and Netflix face a cash crunch as the market tumbles. Startup leaders across industries are bracing themselves for turbulence ahead, once again weighing layoffs as a means of controlling burn rates and attracting new capital.
The Org’s team of journalists is tracking the latest layoffs and hiring freezes at fintech companies. The list is in reverse chronological order, with newer announcements at the top, and we'll be updating it as necessary.
Toronto-based Wealthsimple is the latest fintech to slash staff. Valued at $4 billion last year, the startup cut 13% of its workforce--159 employees--on June 15. "Volatility works both ways, and we’re seeing the other side of it now as the pandemic market conditions unwind," wrote CEO Michael Katchen in a blog post.
Digital banking app Albert laid off at least 20 employees from its 250-person workforce on Friday, June 10, per Dot.LA. The Los Angeles-based startup counted CapitalG and General Atlantic as investors, and it most recently raised a $100 million round in January 2021.
Greg Schwartz, the CEO and co-founder of digital mortgage startup Tomo announced on LinkedIn on May 31 that Tomo would be reducing its workforce "by almost a third." He continued: "To achieve our long-term goals, we are dialing back our market expansion plans and will focus on building tech enabled mortgage experiences that deliver faster, less costly and less stressful experiences for homebuyers and the real estate agents that serve them in our existing footprint." Schwartz and his co-founder Carey Armstrong, both former Zillow executives, raised a $70 million seed round last summer.
In a message to staff posted to the company's blog on May 25, fintech unicorn startup Bolt's CEO Maju Kuruvilla announced that the company would be laying off employees. The news follows Bolt's recent funraising of $355 million at nearly an $11 billion valuation. "To laser focus on our core business and products, we will be prioritizing our roadmap and making several structural changes," Kuruvilla said in the announcement. "Unfortunately, this includes reducing the size of our workforce and parting ways with some incredibly talented people on our team as of today." Bolt also recently made the controversial decision to offer loans to employees who wanted to buy their vested stock options.
PayPal let go of 83 employees from its San Jose headquarters — mainly engineers, managers and directors, the Silicon Valley Business Journal reported. The cuts follow news of PayPal slashing its projections for its full-year profit last month. Last month, too, PayPal announced it would shutter the San Francisco office of subsidiary Xoom.
Klarna revealed it will lay off 10% of its 7,000-strong global workforce, meaning the cuts will impact around 700 employees, according to TechCrunch. The move to reduce headcount at the Swedish buy-now-pay-later fintech shortly follows news that Klarna will reduce its valuation to improve chances of raising more funding. In a message to employees, CEO Sebastian Siemiatkowski said the world has changed since Klarna initially set its strategies for 2022: “Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession.”
MainStreet CEO Doug Ludlow announced in a May 4 tweet that his startup, which helps other startups uncover tax credits, had laid off about 30% of its staff. “We took this action because we believe that there is a very strong chance that today’s incredibly rough market is only going to get worse, and potentially remain so for months, if not years,” he added.
Retail brokerage Robinhood, which reported 3,800 full-time employees at the end of 2021, announced it would be cutting about 9% of its staff, CEO Vlad Tenev announced in a blog post on April 26. Tenev cited “duplicate roles and job functions” for the layoffs, following Robinhood's rapid expansion last year.
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