American payment giant Stripe is laying off roughly 14% of its staff, CEO Patrick Collison wrote in a memo sent to staff on Thursday.
Stripe will be joining a growing number of tech companies that have retrenched workers in the past months.
It would be recalled that Microsoft, Amazon, Netflix, Spotify, Alphabet, and Intel recently laid off some workers citing slow demands for products.
Also, several technology companies have suspended hiring process to prepare for the gloomy economic outlook, Investors King learnt.
While Stripe’s recruiting segment will be most affected, the company noted that the cut is aimed to address growing operating costs amid rising inflation and the fear of recession.
The company explained that it intends to hire a few people next year, therefore its recruitment division will be most impacted by the layoff.
Although the company did not put an exact number of people that will be affected, insider sources however reveal that more than 1,000 workers are likely to be sacked.
According to the Memo which was written by CEO Patrick Collison, the cuts were necessary amid rising inflation, fears of a looming recession, higher interest rates, energy shocks, tighter investment budgets, and sparser startup funding.
Collison noted that all the aforementioned factors represent the beginning of a different economic condition.
Meanwhile, Chief Executive Officer, Patric Collison acknowledged that he and his brother John, the company’s president, were “fully responsible for the decisions leading up” to the layoff. He highlighted the two consecutive mistakes which led to the situation.
Collison noted that the company was “much too optimistic about the internet near term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.”
The other mistake as he penned in the memo was allowing operating costs to increase 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,” Collison noted.