Digital payment processing firm Stripe has decided to lay off nearly 1,120 employees, which is almost 14% of its 8,000-strong workforce. As per an announcement made by Stripe’s Chief Executive John Patrick Collision, this decision was made to deal with economic pressures like inflation, higher interest rates, energy shocks, smaller investment budgets, scarce funding and an uncertain global economic scenario.
In a message to the employees, Collision wrote, “We are overhired for the world we’re in. We need to adapt ourselves appropriately for the world we’re headed into, we need to reduce our costs .”
Stripe is an Irish American Financial Services and Software company founded by two brothers, Patrick and John Collision. It is one of the world’s most highly valued startups and was valued at $95 billion in March 2021 fundraising round. Last year, Stripe processed more than $640 billions in payments, up by 60% compared to 2020.
Those who lost their jobs will receive 14 weeks of severance along with a 2022 annual bonus plus other kinds of support such as six months of healthcare continuation or the cash equivalent of six months of existing healthcare premiums. Severance will be more for those who have served the company for a longer period.
Jobs cuts are the result of “being too optimistic about 2022 and 2023 global economy and digital payment scenario.” As per Stripe, it grew operating costs too quickly and didn’t predict the slowdown. It is one of the most successful startups in the world, however, recent headlines show that it is not protected from ongoing and upcoming global economic uncertainties. However, they are confident that this move will help in increasing their cash flows in upcoming quarters.
Recently, it set a new record for total daily transactions processed and signed up 75% more customers in the third quarter as compared to the same quarter of last year.
