Stripe slashes 14pc of global workforce amid economic downturn

3 Nov 2022

Stripe CEO and co-founder Patrick Collison. Image: Stripe

CEO and co-founder Patrick Collison told employees that the job cuts will bring Stripe’s headcount down to 7,000.

Irish-founded payments company Stripe is laying off 14pc of its staff in preparation for “leaner times”.

CEO Patrick Collison, who founded the company with his brother John Collison, sent an email to Stripe employees today (3 November) confirming the job cuts.

Acknowledging the stellar growth of the company over the past couple of years amid a rise in e-commerce activity during the pandemic, Collison said that “the world is now shifting again”.

“We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets and sparser start-up funding. Tech company earnings last week provided lots of examples of changing circumstances,” he wrote in the email.

Referring to comments made by former US treasury secretary Larry Summers earlier this week, he noted that the US faces complex macroeconomic challenges and that many parts of the developed world appear to be headed for recession. “We think that 2022 represents the beginning of a different economic climate,” Collison said.

The 14pc workforce reduction will involve around 1,000 jobs being cut and will bring Stripe back to its February headcount of almost 7,000 employees globally.

All departing employees are set to receive at least 14 weeks of severance pay, with those with longer tenures set to get more. Annual bonuses will also be given to all those laid off, as well as six months of existing healthcare premiums and a range of other career and visa supports.

Collison admitted that the company “overhired for the world we’re in”. He added that it was “much too optimistic” about the internet economy’s near-term growth and grew operating costs too quickly.

Last year, Stripe revealed plans to add at least 1,000 jobs in Ireland over a five-year period, before announcing further plans create hundreds of software engineering jobs in Dublin.

Collison did not confirm where the job cuts will take place but said headcount changes would not be applied evenly across the company. “For example, our recruiting organisation will be disproportionately affected since we’ll hire fewer people next year,” he added.

“For those not affected, there’ll be some bumpiness over the next few days as we navigate a lot of change at once. We ask that you help us do right by Stripe’s users and the departing Stripes,” Collison went on.

“For the rest of this week, we’ll focus on helping the people who are leaving Stripe. Next week we’ll reset, recalibrate and move forward.”

Just months ago, Stripe slashed its internal valuation by 28pc amid the market downturn. Dually headquartered in Dublin and San Francisco, the company had been valued at $95bn last year.

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Vish Gain is a journalist with Silicon Republic