UK payments company GoCardless is cutting its global headcount by 15%, making it the latest in a string of fast-growing fintech unicorns to prioritise profitability amid a funding drought.
CEO Hiroki Takeuchi announced the full cost-reduction plan to employees today, and published it on the company’s website this afternoon. He aims to reduce the company’s cost base by around 15%.
“In light of the current economic environment, we have decided to focus our efforts on the core areas of our business and reduce our investment in initiatives with longer-term payback,” Takeuchi wrote.
Around 135 roles will be cut, reducing the fintech’s overall headcount to below 800, according to his post.
Roles in the UK, US, Australia and New Zealand will be affected, but the company is not planning on making any redundancies in France. GoCardless is also moving 15 roles from the UK to Riga.
The fintech, which was last valued at $2.1bn in a $312m Series G funding round in February 2022, is also planning to cut its senior leadership team by around 25%. “We believe that a smaller group is more suitable to lead a smaller organisation,” Takeuchi wrote.
Employees will be sent an internal notification letter by 6pm today for British staff and by 9am tomorrow in Australia and New Zealand, letting them know how likely their role is to be cut. GoCardless will let individuals know the final decision “over the coming weeks”, Takeuchi’s message said.
Takeuchi also apologised for his previous communication about the plans.
“Based on feedback I have received it is clear to me that a couple of things did not land as I intended them to,” he wrote.
“In our rush to get everything done, I missed that acknowledgement in last week’s communications. We fully recognise our part to play in this and that as a leadership team we have not delivered. Please believe me when I say we are all soul-searching to reflect on how we do better in future.”
GoCardless is the latest in a string of fintech unicorns, including Klarna, Checkout.com and Pleo, to lay off more than 5% of their global headcount. GoCardless has managed to stave off layoffs far longer than most European startups, many of whom made job cuts early last year as the downturn began.
GoCardless has recently made a big push into open banking, and acquired Latvian open banking startup Nordigen in July last year.
Open banking is a crowded vertical in Europe, and investors and analysts expect it to be one of the fintech subsectors in which we’ll see the most consolidation. Several early-stage startups have appeared on the open banking scene in the last couple of years and are competing for the same pool of customers — which include Europe’s biggest banks.
Investors in GoCardless include Permira, BlackRock, Bain Capital Ventures, Accel, Balderton, Passion Capital and Notion Capital.