The payment processing company Stripe told employees that it intends to lay off more than 1,000 workers in an attempt to cut costs.
The company will cut its workforce by 14% this week in preparation for “leaner times,” according to a letter sent by Stripe co-founders Patrick and John Collison. The company does so as several technology companies are seeing their stocks drop in value and inflation and supply chain delays affect industries worldwide.
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“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” the brothers wrote, according to a copy the letter viewed by Bloomberg. “We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”
Stripe’s head-count changes won’t evenly affect the company, they said, because a large chunk of layoffs would occur on the recruitment side. However, all departing employees will receive at least 14 weeks of severance pay. The brothers also promised to pay all affected workers annual bonuses and unused time off.
Stripe is one of the payment processing companies competing with PayPal and other clients. PayPal cut back on several dozen staff members in May over economic concerns.
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Several companies, including Meta and Snap, have implemented layoffs for hundreds of staff members to cut costs. Twitter is expected to do the same following Elon Musk’s acquisition of it.
Stripe made news in 2021 after it cut ties with the Trump campaign over its connections to the Jan. 6 riots.
