Stripe Inc., one of the world’s most valuable startups, will cut more than 1,000 jobs as it seeks to control costs.
Stripe Inc., one of the world’s most valuable startups, will cut more than 1,000 jobs as it seeks to control costs in anticipation of an economic downturn.
The payments company will cut its workforce by 14% this week, bringing its workforce to nearly 7,000 as of February, co-founders Patrick and John Collison said in an email to staff seen by Bloomberg News. The two pledged to cut spending more broadly as they prepare for “lean times.”
“We were far too optimistic about the near-term growth of the Internet economy in 2022 and 2023, underestimating both the likelihood and impact of a broader slowdown,” the Collison brothers said in the email. “We’ve grown operating costs too fast. Buoyed by the success we are seeing in some of our new product areas, we have grown coordination costs and introduced operational inefficiencies.”
Stripe and its publicly traded rivals have seen valuations plummet as online spending growth slowed in the wake of the pandemic, just as supply chain disruptions and once-in-a-generation inflation also hurt business. The company told executives in July that its internal valuation for the company had fallen to about $74 billion, compared to the $95 billion it received during its most recent fundraising.
The Collisons said the workforce changes would not have an even impact on the company, noting that recruiting activities would be disproportionately affected as the company plans to hire fewer people next year. Outgoing employees will receive at least 14 weeks of severance pay, and the brothers have vowed to pay annual bonuses and unused paid time off for all employees affected by the cuts.
“Stripe is not a discretionary service that turns customers off when budgets are under pressure,” the Collisons said. “However, we must align the pace of our investments with the reality around us. Doing good by our users and our shareholders (including you) means embracing reality as it is.”