Stripe lays off 14% of staff amid challenging economic climate
US fintech Stripe is cutting around 1,100 jobs, 14% of its workforce, as it wrestles with a “different economic climate” following the pandemic era e-commerce boom.
Stripe CEO Patrick Collison
In an email to Stripe employees, CEO Patrick Collison says the firm “overhired for the world we’re in”.
After witnessing “significantly higher growth rates” over 2020 and 2021, Stripe transitioned into a “new operating mode” which saw its revenue and payment volume grow more than 3x.
But the world “is now shifting again”, Collison says. Inflation, energy shocks, rising interest rates, cuts to investment budgets and reduced start-up funding have all led to “a need to match the pace of our investments with the realities around us”.
“Our business is fundamentally well-positioned to weather harsh circumstances,” Collison says, as Stripe is “not a discretionary service that customers turn off if budget is squeezed”. However, he adds the firm must adapt to “leaner times”.
“To adapt ourselves appropriately for the world we’re headed into, we need to reduce our costs,” he writes.
The cuts to its workforce will return Stripe to its February 2022 headcount of almost 7,000 people, Collison adds.
Affected employees will receive a minimum of 14 weeks of severance pay, their 2022 annual bonus, all unused paid time off, six months of healthcare premiums and career support.
Collison says the firm’s leadership “made two very consequential mistakes” over the course of the e-commerce boom: growing operating costs too quickly and being over-optimistic about the internet economy’s near-term growth in 2022 and 2023.
As such, Stripe is “firmly reining in” all other costs.
“The world is hard to predict right now, but we expect that these changes will set us up for robust cash flow generation in the quarters ahead,” Collison adds.
Fintech darling Stripe joins an ever-increasing list of fintechs hit by the current economic volatility and uncertainty.
Brex and MX announced layoffs last month, joining Indonesian fintech Xendit, BNPL giant Klarna, African challenger Kuda and Aussie crypto exchange Swyftx, among others.
