The online payment giant Stripe is laying off around 14 percent of its staff, according to a memo sent to staff Thursday from CEO Patrick Collison.
Rising inflation, high interest rates, recession fears and other economic concerns mean the company needs to focus on “building differently for leaner times,” the CEO wrote.
“At the outset of the pandemic in 2020, the world rotated overnight towards e-commerce… The world is now shifting again. We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding,” Collison said.
“We think that 2022 represents the beginning of a different economic climate.”
But in addition to the economic strains, Stripe’s leadership “made two very consequential mistakes” that contributed to the layoffs, Collison said.
“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown. We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in,” Collision said.
He added that he and President John Collison, his brother, were “very sorry to be taking this step” and “fully responsible for the decisions leading up to it.”
The layoffs, which will bring Stripe’s headcount down to around 7,000, will affect certain areas of the company more than others — the company’s recruitment teams will be “disproportionately affected” due to a lessened need for new hires.
“While the changes today are painful, we feel very good about the prospects for innovative businesses and about Stripe’s position in the internet economy,” Collison concluded.