Nu Holdings, one of the world's largest digital banks, slashed the number of management layers at the company in half to boost efficiency as it roughly doubles in size every few years.
The firm had become "too verticalized," with as many as 14 layers, Chief Executive Officer and co-founder David Velez said in an interview. The structural changes coincided with the recent departures of several top executives, including Jag Duggal and Chief Operating Officer Youssef Lahrech.
"There were four layers between me and the senior managers of the products and like 14 layers across the organization, which is too much for an organization that needs to be agile, make decisions quickly, and has so much growth ahead," Velez said. "We have reduced those layers effectively in half. And we've increased the speed at which we're moving significantly."
Nu, which has more than 118 million clients across Brazil, Mexico and Colombia, will hire new C-level executives in the coming months to help with its push to keep expanding internationally, Velez said.
American Banker recently recognized Nubank as an
The Sao Paulo-based fintech recently announced that former Brazil central bank governor Roberto Campos Neto will join starting July 1 as global head of public policy.
The bank earlier this week announced the surprise exit of Lahrech, who helped fine-tune and improve the credit business over about six years. Velez will take on Lahrech's role for now, increasing his direct reports to 15.
The shares fell 6.1% the next day. Still, the stock has gained about 19% year-to-date and the company, founded in 2013, is worth some $59 billion after going public in late 2021.
Lahrech's departure followed exits this year by Duggal, the chief product officer, as well as Investor Relations Officer Jorg Friedemann and Chief Legal Officer Elita Ariaz.
"While that change is painful — and I think from the outside investors look at this change and I understand how it might seem scary — the reality is that all of these changes are very positive," Velez said. "We are bringing a new set of executives for the new phase."
As part of the internal restructuring, certain managers have gone back to being individual contributors, but there haven't been layoffs and there are no plans for any, Velez said.
The company will continue to hire this year — "probably double digits" — though increased use of artificial intelligence is reducing the need for bigger headcount plans. About 30% of code is now done with AI and 50% of customer-service needs are covered with the tools.
The CEO also said the internal changes are all about execution and efficiency versus a push to cut costs. Certain products that would have taken 10 months to launch are going live now with the moves, he said. Lahrech and Duggal will remain involved as consultants.
"It's a continual rebuilding of the team," the CEO said. "There are a number of skill sets among people that have seen consumer companies in multiple countries around the world and how you use technology across a bunch of different markets that we now need to attract."
