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GoCardless is reducing its global workforce by around 15% and moving some roles from the UK to a lower cost region, as it cuts back investments in longer term initiatives amid the currently challenging economic environment.
The company has closed more than 50 positions that were advertised and reduced its senior leadership team as part of the announcement that will see staff affected in the US, Australia and New Zealand.
The cuts, which includes moving 15 roles from the UK to Latvia, were announced by the fintech’s CEO Hiroki Takeuchi, in a blog post: “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. The changes we are announcing today will get us within touching distance of profitability in the near future.”
London-headquartered GoCardless was founded in 2011 and collects direct debits for businesses ranging from very large organisations down to small window-cleaning businesses. It sets up direct debits for customers, offers services such as know your customer (KYC) checks, and works with the bank to receive payments.
Takeuchi acknowledged that the team has not delivered. “Please believe me when I say we are all soul searching to reflect on how we do better in future,” he told staff in the blog post.
He added that the cuts will get the company within “touching distance of profitability in the near future” and called for more urgency, which he said “will inject more energy into our working environment”.
“Being hungrier to win will create the opportunity for huge personal growth. My hope is that the changes we make will help us to recapture some of the startup spirit that I fear we lost as we have scaled the company,” wrote Takeuchi.
The current global economic slowdown is affecting established fintechs such as GoCardless, which have grown fast over recent years. In February, fintech darling PayPal said it was cutting 2,000 jobs – around 7% of staff – amid challenging economic conditions.
Other recent cuts include UK payments infrastructure financial technology firm Paddle, which has reduced its workforce of more than 350 by 8% as a boost to its business during the Covid-19 pandemic comes to an end.
Fintech firm LendingClub also announced cuts this year, with 14% of its workforce set to go as high interest rates stifle demand for its lending services.
Job cuts are not just affecting challenger finance firms, but the traditional financial services as well as the fast-growing fintech sector. JPMorgan, which has around 300,000 staff globally, recently announced around 500 job cuts, including the removal of roles in the technology and operations departments.
Read more about the fintech sector
- Investment in UK fintech firms increased by 24% to $9.1bn in the first half of 2022, compared with the same period in 2021.
- UK fintech sector attracted the most investment ever in 2021, following a slowdown in 2020.
- Innovate Finance reveals decrease in UK fintech investment, but report methodology leaves this open to change.