Wed. Jul 24th, 2024

Layoffs Spree! This fintech cuts 20% workforce, 282 employees, amid business restructuring

  • Brex, a San Francisco-based fintech company, has laid off about 20% of its workforce, or 282 employees, as part of a restructuring exercise.
  • The decision to reduce the workforce was made in order to enable the company to become a high-velocity organization and to address growth challenges.
  • Affected employees will receive severance pay, waiver of the one-year equity cliff, and outplacement support for job search assistance.
  • The company will provide subsidized health coverage for 6 months through COBRA, including mental health support.

Brex, a San Francisco-based fintech company, has laid off about 20% of its workforce, or 282 employees, as part of a restructuring exercise. The decision to reduce the workforce was made by Brex Founder and co-CEO Pedro Franceschi in order to enable the company to become a high-velocity organization. Franceschi explained that while the company’s spend management solutions have a “massive opportunity ahead,” Brex had grown too quickly and was not operating as quickly as it had in the past. To address this, the company decided to take a hard look at its current structure and reduce the number of layers between leaders and the actual work that affects customers. This restructuring follows a previous round of layoffs in 2022, where 136 employees, or 11% of the workforce, were let go.

The impacted employees will receive eight weeks of severance, with two additional weeks of pay for each additional year of service. They will also receive a waiver of the one-year equity cliff for those who haven’t reached theirs yet, and outplacement support for job search assistance. Additionally, the company will continue subsidized health coverage for 6 months through COBRA, including mental health support. Brex has emphasized that it is committed to supporting its employees during this transition period by allowing them to keep their laptops to assist with the job search process.

This layoff announcement comes as fintech companies and startups across various industries face challenges in the current economic climate. Many companies are streamlining their operations and re-evaluating their growth strategies in order to remain competitive. The impact of these layoffs on Brex’s future growth and performance remains to be seen, but the company’s focus on becoming a more agile organization suggests that it is taking proactive steps to position itself for success in the long term.