Fintech Startup Brex Cuts 20% Of Its Workers
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Fintech startup Brex has laid off 282 members of its workforce. This is around 20% of its employees. The company said it had to make this hard decision, considering the harsh market realities it is facing.
Brex which used to be very successful, shared some news with its workers. The company sent a message to the workers, which was also put on its website. In the note, Pedro Franceschi, the Chief Executive Officer and co-founder of Brex said that the company is thinking about profits in the long run instead of just aiming to get immediate profits.
He wants everybody who stays at the company to be sure and happy about the chance to accumulate more money with the company’s stocks.
Affected Workers To Get Eight Weeks Severance Pay
Brex initially saw a quick increase in business when Silicon Valley Bank collapsed last year. However, its growth has slowed because interest rates went up, and there needs to be more funding available for startups.
As more startups struggled or didn’t grow, Brex’s customers started spending less money overall. Brex recently announced $279 million in annualized net revenue, which was a 32% increase. But most of that growth happened in the first quarter of the year.
Workers affected by the company changes will get eight weeks of severance pay plus two weeks for each additional year they’ve worked. Brex also waivers those who still need to complete their one-year equity cliff.
Brex Is Making Strategic Shifts and Leadership Changes
The platform has experienced ups and downs since June 2022, when they announced they weren’t as well-suited to serve smaller customers. This announcement surprised the startup community.
Brex later explained that when they mentioned smaller customers, they referred to small to medium-sized businesses and startups without funding.
However, this clarification was a surprising change, given that Brex initially began as a credit card company for startups. The announcement came two months after Brex declared a strong focus on software and a shift towards serving more high-valued enterprise customers.
In June last year, Brex made a significant change by appointing Jason Mok as the new head of startups. Jason Mok had over 16 years of experience at Silicon Valley Bank and was previously an operating partner at Andreessen Horowitz (a16z).
Brex’s co-founder Henrique Dubugras, emphasized that supporting founders and startups has always been central to Brex’s mission.
