Tech companies including Amazon, Chime, FIS, Plaid, Stripe and Zilch have announced staffing cuts as economic uncertainty presents risks for the new year.

2023 will encompass “another year of below-potential growth and labor market rebalancing to solve much but not all of the underlying inflation problem,” according to Goldman Sachs’ 2023 U.S. Economic Outlook: Approaching a Soft Landing.

The report, released in November, additionally noted that the overall layoff rate remains low, despite technology sector layoffs surfacing in the space.

20% staff reduction at Plaid

API-data network fintech Plaid, for one, announced that it is cutting 260 employees, or roughly 20% of its team, in a note sent to its staff by Chief Executive Zach Perret Wednesday. “The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth.”

Affected employees will receive 16 weeks of base pay plus additional weeks for those who have been with Plaid for more than one year; cash equivalent for six months of health care; accelerated equity grants for employees who have been with the company for more than a year from Feb. 15, 2023; career and coaching support services; six months of mental health services; immigration work visa counsel; and U.K. and European support for employees in those regions, according to Perret’s memo.

“We’re focusing on supporting our 7,000-plus customers by continuing to build the technology and products they rely on to service hundreds of millions of consumers,” a Plaid spokesperson told Bank Automation News. “While our customer base continued to grow at a steady pace this year, we made the difficult decision to join many companies making prudent preparations for a continued economic downturn moving into 2023.”

Stripe cutting 14%

Payments platform Stripe is cutting 14% of its 8,000-person team, Chief Executive Patrick Collison said in a company memo, noting, “We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets and sparser startup funding.”

The company is offering 14 weeks of severance to laid-off employees; an annual bonus; a cash equivalent for six months of health care; acceleration of everyone who has reached their one-year vesting cliff to the February 2023 vesting date; career support; and immigration support for visa holders.

Stripe is “firmly reigning in all other sources of costs,” Collison said in the memo. “The world is hard to predict right now, but we expect that these changes will set us up for robust cash flow generation in the quarters ahead.”

Other layoffs

The following companies also recently announced layoffs:

• Amazon announced a hiring freeze and decision to eliminate “a number of positions” across its devices and book business, along with staff within its people, experience and technology (PXT) organization, Chief Executive Andy Jassy said in a company news blog post in November. “We are working to support those who are affected and trying to help them find new roles on teams that have a need; and in cases where that’s not possible, we are offering packages that include a separation payment, transitional health insurance benefits, and external job placement support,” Jassy said in the post.
• Chime is laying off 160 people, or 12% of its workforce, according to a company memo in which co-founder Chris Britt explained the decision was made to ensure the neobank is on the right path for profitability.
• FIS is taking “immediate action” to reduce its cost structure, incoming Chief Executive Stephanie Ferris announced during the core provider’s Q3 earnings call. She also said she will be “reviewing and rightsizing the current workforce.” An FIS spokesperson declined BAN’s request for comment.
• London-based buy-now-pay-later (BNPL) fintech Zilch is cutting 10% of its staff in anticipation of a European recession, according to Finextra.

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