BNPL provider Affirm cuts 19% of staff, ends crypto initiative
In a letter to workers regarding the layoffs, CEO Max Levchin stated that “Everything changed in mid-2022,” and further indicated that the Federal Reserve’s interest rate policy “dampened consumer spending and increased Affirm’s cost of borrowing dramatically. The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded.”
The restructuring plan is expected to cost between $35-$39 million.
In a letter to shareholders, Levchin wrote: "Growing rapidly over the last few years, and especially through the pandemic, we hired ahead of the revenue required to support the size of the team.”
The letter to shareholders also announced that the company would be “sunsetting several initiatives, such as Affirm Crypto.” After the announcement Affirm stock tumbled 17%.
The California-based company that was founded in 2012 is the latest in a long list of tech firms announce cuts. The inflation spike and soaring prices of the market are leading to major staff cuts. Recently, payments giant PayPal cut 2000 employees and fintechUpstart followed suit by terminating 20% of its workforce.
Read more on finextra.com
