Stripe is the latest tech firm to cut down jobs after announcing a 14% lay off on Thursday, November 3, 2022. The company’s CEO, Patrick Collison, explained that the move was necessary amid rising inflation, fears of a looming recession, higher interest rates, energy shocks, tighter investment budgets and sparser startup funding.
In his memo, Collison admitted that the executives made judgment errors when calculating internet economy growth in 2022 and 2023, and when they grew operating costs too quickly. The announcement came the same day that Lyft revealed laying off 13% of its employees.
Tech companies of different financial strengths have been showing that they have no faith in the economic outlook changing anytime soon. Others like Amazon, Alphabet, and Meta have introduced several measures including freezing hiring while Netflix, Spotify, Coinbase, and Shopify are some of those who have cut jobs.
Wall Street Journal said that Stripe cut its internal valuation to $74 billion in July 2022 months after it became the most valuable US startup with $95 billion market cap.
Collison said that the layoffs will see it reduce its staff strength to about 7,000, which means that about 1,100 people will lose their jobs at the online payments processing company. However, he promised to pay 14 weeks of severance for all departing employees, their 2022 annual bonus, all unused PTO time, and cash equivalent of 6 months of existing healthcare premiums. In addition, the affected employees will get career support and immigration support to visa holders.
Stripe employees who remain with the company are told to expect some bumpy period as it readjusts.
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