Brex, last valued at $2.6 billion, is restructuring its credit card for startups business and cut 62 staff members, the co-founders Pedro Franceschi and Henrique Dubugras said in a blog post.
“Today we’re restructuring the company to better align our priorities with this new reality, while simultaneously accelerating our product vision. With that, I have some very sad news to share. 62 people will be leaving Brex today,” the post reads.
The cuts come as Brex’s customer base itself is struggling to stay afloat amid COVID-19: high-growth startups. The trickle-down to Brex’s core business, which depends on its customers spending money, was thus expected.
Brex has already cut some customer credit limits to mitigate some of the exposure risk, The Information reported, and Dubugras confirmed. Customers say the credit limit cuts came without warning or notice.
Additionally, the company, launched in Brazil and graduated from Y Combinator, raised $150 million recently.
When TechCrunch talked to Dubugras about the latest fundraise, the co-founder said the capital was offensive, rather than defensive.
“I’m glad this round came together, but if it hadn’t, we would’ve been fine,” he said last week. “The capital is so we can play offensive while everyone else plays defensive.”
In the blog post, the co-founders wrote to former staffers.
“Please continue dreaming big and don’t lose the ambition that attracted you to Brex. Don’t let anything, not even a global pandemic, take that away from you. I wish we could give each one of you a hug, so instead I’ll end this message like I’d do it in Portuguese. Abraços, Pedro and Henrique.”
Those laid off will be provided with eight weeks of severance, their computer and equipment, and Brex will dedicate a part of its recruiting team to help find new opportunities for ex-staffers. Additionally, Brex is making adjustments to the equity cliff and has extended healthcare benefits through the end of 2020.
Brex has amassed $465 million in venture capital funding to date.