Finance firm, Unit,reduces workforce by 15%
Fintech Firms Experience Layoffs Amidst Slower Revenue Growth
In a trend that has been prevalent this year, fintech companies are not immune to staff reductions as they strive to become profitable without raising additional capital. One such company is Unit, a firm that specializes in embedded finance solutions.
Unit, founded in 2019, has built infrastructure for banks and technology companies, aiming to power modern financial experiences reliably and for the long term. The company serves 1.38 million end-customers, with an annualized transaction volume of $28.7 billion, as stated in a company blog post. However, the company has recently announced a 15% staff reduction, affecting approximately 25 employees.
A spokesperson for Unit declined to share further details beyond the company blog post. The CEO of Unit, Itai Damti, emphasized the end-customer demand for modern financial services and the importance of quality infrastructure. Damti also addressed the increased regulatory scrutiny facing fintech in May.
Unit's focus on embedded finance has seen strong and new types of demand, such as banks using Unit's white-label app to power their own bank-branded digital experiences. The company has eight bank partners and works with high-growth start-ups and publicly traded companies.
However, Unit's staff reduction is due to slower than expected revenue growth. The company aims to achieve profitability without raising additional capital, a goal it has always maintained.
Other notable fintech companies that have undergone staff reductions this year include Block (Jack Dorsey's fintech company), Rocket Companies, ConsenSys, and Altruist. Block laid off nearly 1,000 employees, Rocket Companies cut about 2% of its workforce, ConsenSys laid off 47 employees, and Altruist cut 37 jobs, despite pursuing "aggressive" hiring.
These layoffs indicate a broader trend of staff reductions in the fintech industry beyond the three firms mentioned. It is a challenging time for many fintech companies as they navigate the complexities of the industry and strive to maintain profitability.
Embedded finance company Treasury Prime and crypto infrastructure platform Paxos have also recently announced staff reductions. Treasury Prime laid off employees earlier this year, while Paxos has cut 65 employees and narrowed its focus to tokenization. Both companies have cited shifts in focus to certain parts of their business as reasons for their staff reductions.
As the fintech industry evolves, it is clear that companies will need to adapt and make difficult decisions to remain competitive. This year has seen a significant number of layoffs across the industry, but it is hoped that these measures will lead to a stronger and more resilient fintech sector in the future.
References:
- TechCrunch
- CNBC
- Bloomberg
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