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Plaid’s 20% layoffs cap an annus horribilis for fintech
Last year’s fintech funding boom has been met by a global slowdown and fintech companies have put their ambitious and rapid staff expansion plans into reverse.

Huge layoffs in the fintech industry have, sadly, become the norm in 2022.
CEOs facing an uncertain at best and perilous at worst road ahead have focused on 'run way' extension as fundraising has become more difficult. Lower costs equals more run way but also more layoffs.
This week one of the world’s most promising fintech companies Plaid became the latest casualty of the downturn. It let go of 20 per cent of its staff in one swoop, hoping to lower its cost base and prioritise sustainable revenues.
Plaid, which like Stripe, has become synonymous in Silicon Valley circles with digital transformation at the most basic financial infrastructure levels, and therefore potentially extremely valuable, told its c.1400 staff that 260 of them would be let go.
It was handled, to give credit to Plaid founder and CEO Zach Perret, on more generous terms than many other companies.
All departing employees receive 16 weeks of base pay for plus additional weeks for those who have been with Plaid for more than one year as well as six months of health benefits, as most of those let go are US-based, alongside mental health and career support.
Plaid CEO Zach Perret tells a familiar story, common among some of the most highly valued fintech companies. The economic headwinds of 2022 have prompted a tougher market for startups.
“Macroeconomic conditions have changed substantially this year. Despite being well-diversified across every category of financial services, we are seeing customers across the industry experiencing slower-than-expected growth. The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth,” he said
Perret says he remains optimistic for the company and the wider fintech industry but admits to a different era for revenue growth but that short pressures trump the long term trend, in part.
“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,” he said.
“The underlying fundamentals that drive digital finance (and therefore Plaid) are not changing. People continue to need tools and services to manage their financial lives, and the financial industry will continue to move towards digital-first delivery,” he said.
Plaid joins a long list of big fintech companies that have let go huge numbers of people this year including Stripe who similarly let go of a large portion of its team (14 per cent), Chime (12 per cent). Probably the highest number comes from Klarna which has ended the year with about 1000 fewer employees, or 15 per cent of its workforce.
A website tracking layoffs across the tech sector layoffs.fyi estimates about 30,000 layoffs in the combined fintech and crypto space in 2022. The real figure is likely to be higher.
Key to the trend is not just the global slowdown but the rapid expansion in the first two years of the pandemic which prompted a massive acceleration of VC funding to fintech and crypto startups.
There was logic to this rapid growth with fintech adoption dramatically increasing, both in terms of consumer behaviour and digitalisation from large banks. However, the flipside to this was that with the Russian invasion of Ukraine - and all the other macro headwinds - conspiring to put the hiring this prompted into reverse.
“We saw a rapid increase in usage by our existing customers, a large number of new customers signing up for Plaid, and substantial revenue acceleration. As all our metrics continued to grow, we hired aggressively to meet the customer demand we were seeing, and to invest in new products,” Perret said.
Is the panic at risk of being overdone? It is possible but it seems highly likely that we will see more substantial layoffs in the fintech and crypto space in 2023. How long that lasts is harder to guess. The more important question is whether overall, fintech's global workforce expands.