Financial services company Stripe has announced its plan to cut off 14% of its workforce.
This means that the company which has a total of 8,000 workers will see about 1,120 workers laid off.
According to the company, its recent move to lay off workers was necessitated due to the economic downturn and other macroeconomic challenges.
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In a memo published by the company’s CEO Patrick Collison, he disclosed some of the major setbacks that have affected the company.
He said a major hiring spree spurred by the world’s pandemic-driven surge toward e-commerce, a significant growth period, an economic downturn ridden with inflation, energy shocks, Investment Budgets, Shrinking startup funding, higher interest rates, and other macroeconomic challenges all hindered the company’s growth.
He further disclosed that the company is repositioning itself for the changing macroeconomic situation in developed markets such as the United States.
In his words, “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. Doing right by our users and our shareholders (including you) means embracing reality as it is. Today, that means building differently for leaner times.
“We have always taken pride in being a capital-efficient business and we think this attribute is important to preserve. To adapt ourselves appropriately for the world we’re headed into, we need to reduce our costs”.
“In making these changes, you might reasonably wonder whether Stripe’s leadership made some errors of judgment. We’d go further than that. In our view, we made two very consequential mistakes, and we want to highlight them here since they’re important
“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown. We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in”.
The CEO further stated that in terms of severance, all those affected by the lay off, will be paid at least 14 weeks’ worth of pay, although it will depend on the time they served at the company. Also, the company will pay the full 2022 annual bonus, though it will be prorated if any member of the laid workforce joined this year.
Lately, due to the current global Inflation which has led to a serious economic downturn in so many nations across the globe, it has also taken a toll on so many firms which have led to massive layoffs, with Stripe recently joining the pack.
Just this week, there were layoffs at different tech companies such as Dapper Labs, Chime, Message Bird, Gem, Lyft, CloudKitchens, OpenDoor, MessageBird, and Kry. Also, American multinational technology company Apple has announced its plans to freeze hiring until the middle of next year.
Payment system Stripe is preparing for “leaner times” and letting go of more than 1,000 employees, CEO Patrick Collison announced Thursday in a public note to staff. Although the e-commerce checkout platform is “one of the world’s most valuable startups,” Collison admits that the company was “much too optimistic about the internet economy’s near-term growth in 2022 and 2023” and “overhired.” The staff cuts, which account for 14% of its workforce, bring Stripe’s headcount down to roughly the 7,000 employees it had in February. (LinkedIn News)