Stripe is laying off 14% of its staff, its co-founders said Thursday, as the fintech startup must start "building differently for leaner times."
The layoffs will bring the online payments company down to about 7,000 employees, according to a memo to staff from co-founders Patrick and John Collison that Stripe also posted publicly.
"We have always taken pride in being a capital efficient business and we think this attribute is important to preserve," the email said. "To adapt ourselves appropriately for the world we’re headed into, we need to reduce our costs."
The company's revenue and payment volume tripled from the start of the pandemic as the "world rotated overnight towards e-commerce," the Collison brothers' memo said. But Stripe made mistakes mistakes leading into 2022, they acknowledged.
"We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown," the Collisons wrote. "We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in."
The job cuts will return Stripe to the head count it had in February, and the company is also cutting costs elsewhere. The firm's recruiting division will be "disproportionately affected" by the layoffs since the company plans to hire fewer people, the Collison brothers wrote.
Affected employees will be given a minimum of 14 weeks' severance pay, according to the memo, as well as other assistance such as immigration support for workers in the U.S. as visa holders.