Fintech firm Affirm lays off 19% of workforce

SAN FRANCISCO: US-based financial technology company Affirm has laid off 19 per cent of its workforce, the company announced in its second-quarter earnings report.

"We are reducing the size of our team by 19 per cent. This was the single most difficult decision I have had to make since Affirm's founding, but I believe it is the right one. I take full responsibility for it and the actions that led us to this point," Founder & CEO Max Levchin wrote in a message.

Levchin further said that during the early part of the pandemic, the company "consciously hired ahead of the revenue required to support the size of the team", with revenue growth justifying the strategy.

Moreover, the fintech firm also mentioned that the company will be sunsetting several initiatives, such as Affirm Crypto. The CEO told shareholders Affirm expects to keep its headcount "essentially flat for the foreseeable future".

"In FQ2023, we redirected the substantial majority of our R&D efforts towards margin-improving projects, repeat consumer engagement, and Debit+ and plan to continue executing this focused roadmap for several quarters," Levchin said.

The employees that are laid off in the US will be offered a minimum of 15 weeks base pay as severance plus an additional week per year of tenure, according to the company.

Laid-off US workers will also receive a $5,000 health stipend regardless of enrollment status, covering six months of employee healthcare. However, non-US employees will receive severance and healthcare benefits "in line with local practices".