News

Tech’s pandemic hiring boom continues to bust as fintech Plaid adds to mounting layoffs

Zach Perret, CEO and co-founder of Plaid, speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Jan. 31, 2020.
George Frey | Bloomberg via Getty Images

Fintech firm Plaid is laying off about 260 employees, adding to a recent wave of cuts from private tech companies. CEO Zach Perret announced the layoffs in a memo sent to staff Wednesday morning, citing macroeconomic challenges throughout the past year.

The company currently has more than 1,250 team members in seven offices worldwide, according to the Plaid website.

Plaid’s platform allows users to link their bank accounts to fintech apps such as Venmo, Robinhood and Coinbase. The company has experienced steady growth since it first launched in 2013, with more than 12,000 financial institutions now supported by Plaid and more than 7,000 fintechs built on the service.

The company experienced a rapid increase in the use of its platform by both new and existing customers during the pandemic and hired aggressively to meet that consumer demand, Perret said. With slower-than-anticipated growth throughout the industry in 2022, costs outpaced Plaid’s revenue growth. Perret also said in the memo the number of Plaid customers has grown about 50% in the past year, with consumers using the platform growing at rapid rates.

Plaid’s growth had led to a valuation over $13 billion in 2021, and before that, a deal announced by Visa to acquire the company, but that acquisition was abandoned after the Department of Justice sued to block it.

“Today’s changes were incredibly tough, but they were also necessary,” Perret said in the memo. “They will allow us to continue to operate from a position of strength so we can best support our customers and the millions of consumers we jointly serve for the long-term.”

The announcement comes amid a string of layoffs among tech companies, including Meta, Twitter, Lyft and Coinbase, among others. At least one third of CNBC Disruptor 50 companies have announced layoffs in the last year.

Stripe, an online payment company that competes directly with Plaid, laid off 14% of its workforce last month, while another fintech company, Chime, also cut 12% of employees last month.

In total, layoffs across the tech sector nearly doubled from October to November, and there are signs from Silicon Valley that deeper cuts are still to come.

Plaid ranked No. 47 on the 2022 CNBC Disruptor 50 list.

In an email to CNBC, Plaid spokesperson Freya Petersen said teams across the company will be affected by the layoffs, though areas like recruiting may be more impacted due to reduced headcount goals going into 2023. Affected employees will be offered 16 weeks of pay, with additional weeks being paid for employees who have been with the company for more than a year. Equity grants for employees with the company for more than a year will be accelerated to a February vesting date.

Sign up for our weekly, original newsletter that goes beyond the annual Disruptor 50 list, offering a closer look at list-making companies and their innovative founders.

Leave a Reply

Your email address will not be published. Required fields are marked *