After a period of rapid growth, many payments companies were forced to pump the brakes in 2022, and that included trimming workforces.

Payments players across the spectrum cut employees this year, from public companies PayPal and Fiserv, to payments darlings Stripe, Klarna and Plaid, to younger startups Bolt and Amount.

Macroeconomic headwinds this year — including geopolitical conflict as well as inflation and its effect on consumer behavior — have squeezed payments and fintech companies. That’s led some to take a hard look at expenses and pursue restructuring. 

Other firms that had pegged their growth projections on COVID-19 pandemic-fueled e-commerce trends had those plans upended when shoppers returned to stores as the deadly contagion ebbed. Many payments companies were overly optimistic in that regard, said Jordan McKee, principal research analyst with 451 Research, part of S&P Global Market Intelligence.

Some firms were “hiring for a future where we continued to see dramatic e-commerce growth, and just dramatic digitization of everything, and that just didn’t play out to the scale that most anticipated,” McKee said. 

The CEOs of digital payments company Stripe and fintech Plaid were transparent about that in their web posts on job cuts, McKee noted. In November, Stripe cut 14% of its workforce, which amounted to about 1,140 employees. Plaid this month said it was cutting 20% of its workforce, or about 260 employees. 

Stripe’s leadership was “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,” CEO Patrick Collison wrote in a web post. The company also “grew operating costs too quickly,” allowing “operational inefficiencies to seep in,” they wrote.

Buy now-pay later provider Klarna also posted publicly about job cuts triggered by economic upheaval, as did expense management startup Brex and online checkout startup Bolt. 

Klarna cut 10% of its workforce, or about 700 workers, in May, and followed that up with more cuts in September. Brex cut about 11% of its workforce, or 136 employees, in October. Bolt cut 30% of its workforce in May, which Bloomberg reported amounted to about 250 workers.

Checkout startup Fast shut down entirely in April, just months after its CEO Domm Holland promised the company would experience heady growth. Fast had nearly 400 employees, Holland told Payments Dive in January.

Higher inflation and interest rates, paired with a drop in stock market valuations, have also made it harder for private companies to find once-plentiful venture capital, which was essential to fuel their growth spurts. “They just can’t get capital as easily as they could have a few quarters back,” McKee said.

Nonetheless, large public companies such as PayPal, Fiserv and Fidelity National Information Services (FIS) have also sought to rein in expenses, in part by paring workers. As activist investor Elliott Investment Management acquired a $2 billion ownership stake in PayPal, the digital payments company pursued cost-cutting measures this year. 

Payments giant Fiserv has cut workers as it’s faced profit margin pressure and rival FIS is reported to be cutting thousands of jobs as it embarks on a $500-million savings campaign and comprehensive review of the business.  

To be sure, there was hiring happening, too. Even as the company made cuts, Fiserv CEO Frank Bisignano said the payments giant hired “thousands” this year. Brex, too, continues to hire for key roles and some replacements. Cross-border payments company Wise and payments processing company VizyPay recently said they plan to step up hiring. 

The industry is likely to shed more jobs next year, Brex’s Chief People Officer Angela Crossman recently told Payments Dive. That’s because many fintechs are now focused on profitability over growth and ensuring they have needed flexibility in case capital continues to be scarce.

“It’s going to continue,” Crossman said of job cuts. “People are letting go of really great talent to just recognize shifts in business and the environment.”

If current economic conditions persist and interest rates and inflation remain high, more job cuts next year could be coming, McKee said. Still, “I’d like to think we’ve seen the bulk of it through this quarter,” with payments and fintech companies on more stable footing in 2023, he said. 

By Caitlin Mullen on Dec 21, 2022
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