The U.S. San Francisco-based fintech company Plaid announced on Wednesday that it is laying off 260 employees, or about 20 percent of its workforce.
According to the company, “teams across the company” were affected, and “teams like recruiting are impacted more than others.”
In a letter to employees that was posted on Plaid’s website, CEO and co-founder Zach Perret said that during the COVID pandemic, the company saw a dramatic increase in fintech adoption.
“We saw a rapid increase in usage by our existing customers, a large number of new customers signing up for Plaid, and substantial revenue acceleration,” so the company hired aggressively to meet the customer demand and to invest in new products, Perret said.
He admitted that the macroeconomic conditions have changed substantially this year. “The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth. I made the decision to hire and invest ahead of revenue growth, and the current economic slowdown has meant that this revenue growth did not materialize as quickly as expected.”
In March, Plaid CTO Jean-Denis Greze told TechCrunch that the engineering team grew 17.5 folds in just four years, from 20 engineers to 350 people.
With concerns about a coming economic recession, a growing number of large U.S. tech and media companies, such as Amazon, Facebook and Twitter, have announced massive layoffs in recent weeks.