Plaid said it cut 260 staffers Wednesday after changing macroeconomic conditions forced it to rein in costs.
The San Francisco-based company, which provides connections between popular financial-technology apps and consumers' bank accounts, will provide 16 weeks of separation pay and accelerate equity grants for some employees, Chief Executive Officer Zach Perret said in a
"The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth," Perret said. "I made the decision to hire and invest ahead of revenue growth, and the current economic slowdown has meant that this revenue growth did not materialize as quickly as expected."
Plaid joins a slew of fintechs that have reduced headcount in recent weeks, including Stripe and Chime Financial. The moves come as their publicly traded peers have seen valuations drop this year and venture-capital funding for the industry has slumped.
In his memo, Perret said employees in the UK and across Europe would be affected by Plaid's cuts. The company also promised dedicated immigration counsel to those dismissed staffers who were on a work visa.
"We have removed access to many systems for those of you that are leaving," Perret said. "I understand that this might make the process seem more abrupt, but I hope you will understand given the sensitive nature of data in our industry."
Fintech funding plummeted 64% in the third quarter to $12.9 billion, the worst funding environment since the depths of the pandemic in 2020, according to CB Insights. The number of so-called mega-rounds dropped to 19, which is the smallest amount since 2018.
It's a far cry from a year ago, when financial startups were attracting record levels of customers and funding was plentiful. At Plaid, which counts apps including Venmo and Betterment as customers, the company hired aggressively to meet new customer demand.
"Macroeconomic conditions have changed substantially this year," Perret said. "Despite being well-diversified across every category of financial services, we are seeing customers across the industry experiencing slower-than-expected growth."
