Stripe has let go of 14% of its workforce
Thursday afternoon, CEO Patrick Collison informed employees through a memo that the online payments firm Stripe will be laying off about 14% of its workforce.
Collison wrote that the reductions were essential due to rising prices, recession worries, increased interest rates, energy shocks, reduced investment budgets, and limited startup funding. Put together, these indicators suggest “that 2022 heralds the beginning of a changed economic climate,” as he put it.
Collison said the corporation made “two very consequential mistakes” when it overestimated the rate of growth of the internet economy in 2022 and 2023 and when it expanded its operating expenses too rapidly.
As the economy worsens, technology businesses have begun announcing layoffs and hiring restrictions in an effort to save expenses. Amazon, Alphabet (parent company of Google), and Meta (owner of Facebook) have all taken measures to reduce costs. As of late, many companies have announced staff reductions, including Netflix, Spotify, Coinbase, and Shopify.
Although Stripe, situated in San Francisco, was valued at $95 billion last year, the company apparently dropped its internal valuation to $74 billion in July due to economic uncertainties and a lengthy tech downturn, as reported by The Wall Street Journal. Block’s Square payments and PayPal are two of its main competitors, and it processes billions of dollars’ worth of transactions annually for companies like Amazon, Salesforce, and Google.
As a result of the layoffs, Stripe expects to cut its workforce from over 7,000. A representative from Stripe was not immediately available to comment on how many workers were affected.
Collison wrote in the message that the layoffs will touch a wide range of Stripe departments, but that the majority would occur in recruiting due to the company’s intention to reduce headcount in the coming year.
Stripe plans to reduce costs across the board and has begun laying off employees as a result, according to Collison.