Stripe Cut 14% of Its Workforce

Stripe, one of the Fintech industry’s biggest success stories, moved to lay off more than 1,000 employees, or around 14% of the company, in early November.

CEO Patrick Collison broke the news to his workers via a memo on November 3 where he, like many others before him, blamed economic conditions, inflation, and rising interest rates, for contributing to an untenable business environment. Collison described the cuts as, “the hardest change we have had to make at Stripe to date.”

Stripe, which helps process credit card payments, had a front row seat to the e-commerce boom ushered in by the covid-19 pandemic. As a result, the company’s growth skyrocketed, with both payments and revenue growing by three fold. That temporary pandemic high wouldn’t last though, and now Stripe’s reeling from the come down.

“We have always taken pride in being a capital efficient business and we think this attribute is important to preserve,” Collison wrote. “To adapt ourselves appropriately for the world we’re headed into, we need to reduce our costs.”

Collier went on to admit several errors of judgment by the company’s founders. First, they were simply too optimistic about the internet economy’s 2022 growth. Related to that, Collier said the founders grew the company’s operating costs too quickly.

“We are going to correct these mistakes,” Collier wrote. “The world is hard to predict right now, but we expect that these changes will set us up for robust cash flow generation in the quarters ahead.”