Stripe slashes 14% of workforce

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Stripe laid off 14% of its workforce on Thursday as it looks to cut costs in preparation for a "different economic climate." 

"The world is now shifting again," Stripe CEO Patrick Collison wrote in an email to staff. "We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding." 

While Collison said that Stripe's business is "fundamentally well-positioned to weather harsh circumstances", he claimed that the firm was "much too optimistic about the internet economy’s near-term growth" in 2022 and 2023 and "grew operating costs too quickly."

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The financial services giant's layoffs will reduce its headcount to a total of almost 7,000 people. Though multiple divisions will be impacted, Collison said that recruiting would be heavily hit as the company plans to hire fewer people next year.

Impacted employees will receive 14 weeks of severance, their annual bonus for 2022, payment for unused PTO, the cash equivalent of 6 months of existing healthcare premiums or healthcare continuation, and career and immigration support. Additionally, departing employees who have already reached their one-year restricted stock unit vesting cliff will be accelerated to a February 2023 vesting date. 

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The logo of Stripe, an online payment platform is seen displayed on a smartphone screen with an economic stock exchange index graph in the background.  | Getty Images

In addition to changes to its headcount, Collison said Stripe would rein in "all other sources of cost." 

"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," Collison added.

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The move comes as Stripe signed 75% more new customers in the third quarter of 2022 than the same period a year ago.

"Our competitive win rates are getting even better, our growth rates remain very strong, and on Tuesday we set a new record for total daily transaction volume processed," Collison said. 

In addition to Stripe, other companies that have laid off employees this year include Zillow, Seagate, Credit Suisse, Netflix, Peloton, Beyond Meat, Oracle and Coinbase. 

Meanwhile, Facebook parent Meta Platforms, Google parent Alphabet and Amazon have all signaled that they plan to slow down hiring moving forward.