Stripe lays off 1100 employees

Stripe lays off 1100 employees

Payments behemoth Stripe is the latest fintech to take the axe to its global workforce, laying off more than 1100 - 14% - of its staffers.

Outlining the cuts in a note sent to employees and posted online, Stripe CEO Patrick Collison cites "the beginning of a different economic climate".

However, he also acknowledges that the company's leadership "made two very consequential mistakes". First, the firm was too optimistic about the internet economy's near-term growth, and second, it grew operating costs too quickly.

The firm embarked on a hiring spree as it adjusted to the surge in e-commerce growth during the pandemic.

But, Collison says that the "world is now shifting again", facing up to inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding.

"We overhired for the world we’re in, and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe," he writes.

In July, Stripe slashed its valuation by 28%, wiping $21 billion off its $95 billion valuation at a March 2021 funding round.

Collison insists that Strip is "fundamentally well-positioned to weather harsh circumstances" but needs to match investments with the new economic realities.

Laid off staff will get at least 14 weeks of severance pay and their 2022 bonus, as well as career and immigration support.

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Comments: (4)

Gerard Hergenroeder
Gerard Hergenroeder - Payments Shark - Millersvile 03 November, 2022, 20:16Be the first to give this comment the thumbs up 0 likes

I am not surprised by this layoff. Ecommerce has been around for a long time now. The Corona virus is almost over and so is the exponential ecommerce growth. Amazon is feeling it a slow down big time. There is a lot competition in this space. Stripe's layoffs will enable their competitors to take some share.

A Finextra member
A Finextra member 03 November, 2022, 21:08Be the first to give this comment the thumbs up 0 likes

The elephant in the room question, with this and similar actions in other fintechs: was this a decision by the founders, or the VCs?

Mike McCormack
Mike McCormack - PALMA ADVISORS LLC - Fort Lauderdale 03 November, 2022, 23:021 like 1 like Kudos to the Collisin brothers for addressing this layoff ethically and honestly, and admitting an executive MC level error. FIS deservedly lost 1/3rd of its market cap today, stock down 29%, over CEO / MC and Board level fumbles. Fiserv has thrown out 100s of highly experienced people out all year long, no senior exec courage or integrity to come out with announcement or admit their own mistakes. If you hold all the authority at the top, you have all the responsibility. The Collisons get that, bravo.
A Finextra member
A Finextra member 09 November, 2022, 12:33Be the first to give this comment the thumbs up 0 likes

In my option all of these fintech stocks were way of valued. I guess the new math has extrem flaws in it. The bankers and analysist make big bucks by providing the over vaulation and the stock holder take it in the shorts.