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Despite the economic downswing which has made Klarna wants to lay off staff, fintech like Revolut and Wise are not cutting jobs.
While financial company Klarna intends to lay off some employees, its fintech rivals Revolut and Wise (LON: WISE) plan to hire more staff. At the beginning of the week, Klarna revealed its plan to let off about 10% of its workforce across the globe. The announcement was made by the company’s CEO and co-founder, Sebastian Siemiatkowski, who passed the message through a pre-recorded video message. The CEO said the current world is different from when Klarna set its business plans for 2022 in the past year. He referred to the Russian invasion of Ukraine and the shift in consumer sentiment. Siemiatkowski also mentioned inflation and the volatile global stock markets as part of the changes within a year.
Klarna Cut Jobs Unlike Revolut and Wise
Despite the economic downswing which has made Klarna wants to lay off staff, fintech like Revolut and Wise are not cutting jobs. None of Klarna’s rivals is also not freezing hiring due to the ongoings. Instead, Revolut said it is “actively hiring.” The company currently has 251 open positions on its websites, which it is recruiting for.
As for Wise, CEO Kristo Kaarmann said fintech is in a “different place” from other tech firms laying off staff. He took to Twitter (NYSE: TWTR) to say:
“Years of building Wise as a profitable long-term company is paying off now. We’re in such a different place to other tech, who are working on layoffs. So much demand for international banking, we can’t hire people fast enough to build it. 385 open roles.”
At the same time, German digital bank N26 is also not reducing its workforce. Similar to Revolut and Wise, N26 said it has no plans to reduce headcount. A spokesperson from the company said N26 would make “strategic investments” to expand its team. The representative added that N26 would focus on technology, product, compliance, and the prevention of financial crime.
More Firms Reduce Headcounts
Meanwhile, Klarna is not alone. The tech industry benefited from the pandemic with the world shifted to online payments, but it seems the bubble is bursting. Trading app Robinhood (NASDAQ: HOOD) had to dismiss over 300 employees, representing 9% of its headcount. The incident happened in April after the company rapidly hired thousands of people over the past year. According to CEO Vlad Tenev, Robinhood employed more than 3,000 people between 2020 and 2021. The CEO said the headcount reduction was necessary to improve efficiency and velocity.
Mortgage startup Better.com also cut off approximately 4,000 workers. The company started laying off staff in 2021 when CEO Vishal Garg told employees in a video call that the company had lost $100 million. He announced the dismissal of hundreds of people during the Zoom call. Better.com announced the layoff of more staff in March, letting go of 3,000 employees.