Digital bank Chime confirmed today that it is laying off 12% of its workforce, or about 160 people. The Information first reported the news.
According to an internal memo obtained by TechCrunch, Chime co-founder Chris Britt described that the move was one of many that would help the company thrive “regardless of market conditions.” In the memo, Britt said that he and co-founder Ryan King are re-calibrating marketing spend, decreasing the number of contractors, adjusting workspace needs and renegotiating vendor contractors.
“The changes will help, but we also need to adjust the size of our organization as we increase our focus and forge our path to profitability,” Britt wrote in the memo. Chime was notoriously one of the first neobanks to hit EBITDA profitability, a milestone it shared when it hit $14.5 billion two years ago. Its latest public valuation was $25 billion. Since its 2012 inception, Chime has raised a total of $2.3 billion in funding, according to Crunchbase.
Sure enough, the co-founder added that the startup is “well-capitalized” but the financial market uncertainty was a factor in these changes.
A spokesperson for Chime reiterated this perspective, adding over email that “as we look at current market dynamics, we are adjusting our organization to be fully aligned with our company priorities. As a result, we are eliminating some positions, while still hiring to select others.” The spokesperson did not immediately respond to other questions regarding severance details, the impact on C-level executives and salaries, as well as the profitability of the company.
The company’s memo, along with the fact that Chime has paused its public debut plans, suggests that growth trends may have changed – a fate other fintechs have been similarly dealing with. Most recently, corporate spending startup Brex cut 11% of staff after being valued at $12.3 billion earlier this year, also citing the challenging macroeconomic environment.
Still, broadly speaking, the tide is somewhat shifting on the cadence of tech layoffs. According to layoffs.fyi, nearly 70% of people who have been laid off this year lost their jobs during May, June, July and August. Since the summertime of sadness, staff cuts have decreased. September had half the number of layoff events than August, and in October, new layoff events slowed while people impacted slightly inched upward from August. While November is off to a not-so-great start, considering Chime’s cuts and Opendoor’s 18% reduction that happened just hours ago, the data brings some hope.