SAN FRANCISCO (KRON) — In the latest sign of headwinds for the technology and financial-tech sectors in particular, San Francisco-based Plaid Inc. has laid off 260 staffers, according to a memo sent to staffers by CEO Zach Perret. The cuts impact about 20% of the staff of the company that connects financial accounts to apps.
“Today, I’m announcing the most difficult change we have had to make at Plaid to date,” wrote Perret in the memo, which was dated Dec. 7, 2022. “I made the hard decision to reduce the size of our team, and in doing so, to say goodbye to approximately 260 talented plaids.”
In describing the conditions that led to the layoffs, Perret sounded a now familiar refrain.
“During COVID we saw a dramatic increase in fintech adoption, at a pace that was well beyond what we predicted,” he wrote. “As all our metrics continued to grow, we hired aggressively to meet the customer demand we were seeing, and to invest in new products.”
“Macroeconomic conditions have changed substantially this year,” he continued. “Despite being well-diversified across every category of financial services, we are seeing customers across thei industry experience 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.”
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Companies that scaled too aggressively during COVID and are now downsizing has been a recurrent theme among the latest round of tech layoffs to hit the Bay Area. Tech giants like Facebook parent company Meta Inc. and other fintech firms like Stripe and Chime have all cited overly-aggressive hiring during the pandemic as among the reasons for recent layoffs.
Like the tech and fintech sectors, the crypto industry has also been roiled with layoffs, with SF-based Kraken recently laying off about 30% of its staff.
Plaid employees who have lost their jobs will get a severance package that includes 16 weeks of base pay, six months of health insurance, equity in the company, career and immigration support, and mental health coverage.