Monzo and Starling to furlough staff amid coronavirus outbreak

Digital banks Monzo and Starling have made moves to protect their businesses amid the coronavirus pandemic, with both furloughing staff and Monzo CEO Tom Blomfield giving up his salary entirely, TechCrunch reported on Tuesday.

News of Monzo’s CEO Tom Blomfield forgoing a salary and senior management taking a 25 per cent pay cut was revealed in a company-wide memo.

The memo also asked members of staff to consider voluntary furlough for two months in line with the Government programme to protect the UK’s jobs during the coronavirus pandemic.

Monzo is reportedly allowing up to 175 customer service voluntary furlough applications and 120 in other departments.

Similar to its rival, Starling Bank also confirmed it has placed 41 members of its staff on furlough and says it is “topping up their salaries to ensure they get 100 per cent”.

The digital bank said most of its employees being placed on furlough are “relatively new and have not completed their training, so are unable to work from home,” with the rest being facilities staff whose services are not required at the moment.

To reassure potentially concerned users of the bank, a spokesperson for Starling said: “The rest of Starling’s customer service team remains busy.”

“Starling is well-funded, our TV ad campaign is doing extremely well and we are still growing fast, adding new business and personal customers every day. It’s business as usual and no-one is taking a pay cut.”

Furlough is the process whereby companies can essentially ‘pause’ the contract of an employee without making them redundant.

Chancellor of the Exchequer Rishi Sunak recently confirmed that employers could claim up to 80 per cent of a furloughed employees salary under the Coronavirus Job Retention Scheme.

Revolut has been contacted by AltFi on whether it has furloughed staff, but has yet to comment.

Starling and Monzo are two of the UK’s biggest digital banks so this begs the question: Will other UK fintechs follow suit?