Fintech companies cut costs for the first time by staff reduction #

Thousands of employees are losing their jobs in the financial-technology industry as companies decide to cut costs.

Affirm Holdings Inc., a “buy now, pay later” lender, and an online platform Upstart Holdings Inc. are firing every fifth employee. The market shakes as a bevy of other fintechs are reducing their staff in order to cut costs.

Charlotte Principato, financial services analyst at Morning Consult believes that it was inevitable as “a lot of fintechs are being forced to mature and streamline more rapidly than they planned to, and job cuts are a quick way to do so”.

The fintech industry boomed during the pandemic, harvesting the outcome of low interest rates and consumer aspiration for debt. Now, they are facing a decline in demand and increased interest rates which leads to job cuts.

Blend Labs Inc. announced cutting 28% of its onshore jobs, Plaid Inc. fired 260 employees and PayPal stated the dismissal of 2,000 employees. More companies are stepping on the same road with Stripe Inc. cutting more than 1,000 jobs and Chime Inc. reducing 12% of their staff.