San Francisco Fintech Firm Plaid Layoff 20% of its Staff

California-based fintech giant Plaid announced plans to lay off 260 members of its team which is approximately 20% of the entire company.

According to a message sent to the employees from the Chief Executive Officer (CEO) Zach Perret, those who have been impacted by the decision will receive a mail to that effect. 

“Today, I’m announcing the most difficult change we have had to make at Plaid to date. I made the hard decision to reduce the size of our team, and in doing so, to say goodbye to approximately 260 talented Plaids. Our people are the driving force of Plaid, and the caliber of our team and the connection we have with each other makes this decision all the more difficult,” Perret said

As part of the separation pay, imparted employees will receive sixteen months’ pay which is about four months’ pay.

Also, they will get six months of healthcare and career support in cash to enable them to transition easily. This severance package is quite similar to what digital assets service provider Stripe offered last month when it reduced its company’s headcount by 14%.

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Perret explained that the company’s massive increase started in the days of the COVID-19 pandemic. Plaid hired more talents when it began to experience significant growth with many customers signing up for their services.

However, the year has been different for businesses generally as “macroeconomic conditions have changed substantially this year.” Zach agreed that this change is a general phenomenon especially, as most of its customers are experiencing slower-than-normal growth. 

“The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth. I made the decision to hire and invest ahead of revenue growth, and the current economic slowdown has meant that this revenue growth did not materialize as quickly as expected,” The CEO explained.

Koinly, an early-stage venture capital firm based in London has equally announced a 14% cut in the size of its workforce. “We are taking measures to ensure we’re as lean as possible as we make our way through the crypto winter,” CEO Robin Singh said. “While change is an unavoidable part of business, it’s been a sad week at Koinly as we have had to let go of several of our colleagues.”