Stripe lays off 14% of workers

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  • Online payments giant Stripe is laying off about 14% of its workforce, CEO Patrick Collison wrote in a memo to employees on Thursday.
  • The reduction is the result of a very rapid increase in operating costs. The leadership miscalculated how much the Internet economy would continue to grow, Collison wrote in the memo.
  • He said Stripe’s recruiting division would be hit the hardest by the layoffs.

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Online payments giant Stripe is laying off about 14% of its employees, CEO Patrick Collison written in a memorandum to employees Thursday.

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In the memo, Collison said the cuts were necessary amid rising inflation, fears of an impending recession, high interest rates, energy shocks, tight investment budgets and sparse startup funding. Taken together, these factors indicate that “2022 represents the beginning of a different economic climate,” he said.

Collison acknowledged how much the Internet economy would grow in 2022 and 2023, and that the company’s leadership made “two very consequential mistakes” when it raised operating costs too quickly.

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Amid the deteriorating economic outlook, technology companies are announcing layoffs and hiring as they move to cut costs. heroinegoogle parent Alphabet and owner of facebook meta Everyone has taken steps to rein in the expenses. including companies Netflix, Spotify, coinbase And Shopify Layoffs announced.

San Francisco-based Stripe became the most valuable US startup last year with a valuation of $95 billion, though it slashed its internal valuation to $74 billion in July amid economic uncertainty and a prolonged tech path. wall street journal, It processes billions of dollars in transactions each year from the likes of Amazon, Salesforce and Google, and competes with blockSquare Payments and paypal,

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Stripe said its workforce would be reduced to about 7,000 employees, meaning the layoffs would affect about 1,100 people. A Stripe spokesperson was not immediately available to provide the exact number of employees affected.

In the memo, Collison said the cuts would affect several divisions of Stripe, though most would be in hiring, as the company plans to hire fewer people next year.

Collison said that in addition to laying off employees, Stripe intends to rein in costs across the company.

Check out Collison’s full memo here:

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