Zilch poised to axe 10 per cent of workforce

UK-based buy now, pay later startup Zilch is set to be the latest fintech to be hit by job cuts, which could see more than 10 per cent of the workforce axed, according to a report.

London-based Zilch,which was valued at $2bn in a funding round earlier this year, is set to begin restructuring, which is expected to see more than 30 layoffs, in news first reported by the Evening Standard.

The report, which has not been denied by Zilch, also says that new recruits set to join Zilch have had their job offers rescinded as part of the plans to reduce headcount.

The layoffs at Zilch come as the fintech industry faced the reality of a recession and rising interest rates.

On the job board Glassdoor, an ex-employee at Zilch spoke of low morale due to the redundancies at Zilch while there are also reports of a Zilch HR executive being kicked out of their work email as they looked to recruit new employees.

Earlier this month, Zilch hit the three million customer mark, which followed a big few months for Zilch, with moves including a new partnership with Experian, US expansion and a $50m Series C round that kept its valuation at $2bn. 

The buy, now pay later sector was supercharged by the rise in e-commerce during the pandemic but has been hit hard by the tough economic situation across Europe, as rising food prices in supermarkets and energy bills are causing consumers to tighten their belts.

This year buy, now, pay later poster child Klarna has been hit by two rounds of job cuts, one of which accounted for around 700 staff, or around 10 per cent of its workforce. 

Other fintechs to be hit by job cuts this year include TrueLayer and Railsr.

A spokesperson for Zilch said: “In just 24 months since launch, Zilch has created over 250 new jobs, gained millions of customers at record speed and recently turned gross profitable.

“But in the last year the world has changed, and any business that thinks it’s immune to this historic economic change is mistaken. With millions of customers depending on us, we must continue to drive towards bottom-line profitability.

“We are shifting our priorities from high growth towards even greater product development and innovation, and as part of this strategic shift in focus, we are planning to hire around 20 people into new positions alongside the ongoing collective consultation process for certain roles that have been placed at risk, resulting in a relatively small net adjustment to our total headcount.”