Fintech Firm Plaid to Lay off 260 Employees

US-based Fintech firm Plaid is laying off 260 employees, or about 20% of its workforce, the company announced.

While specific details around who exactly was affected remain unknown, sources in recent months had revealed that the San Francisco-based startup's engineering team was likely to take a big hit. In March, Plaid CTO Jean-Denis Greze said that he grew his engineering team 17.5x in just four years, from 20 engineers to 350 people. The cut likely reverses some of that hyper-growth. 

A company spokesperson did not disclose how many engineers are being impacted, saying "teams across the company" were affected. She added that since Plaid is "aligning to updated headcount goals, teams like recruiting are impacted more than others."

In a letter to employees that was posted on Plaid's website, CEO and co-founder Zach Perret said the company saw a rapid increase in usage by its existing customers, a large number of new customers and "substantial revenue acceleration" during COVID. As such, the company "hired aggressively" to meet customer demand and invest in new products. However, macroeconomic shifts resulted in Plaid customers experiencing "slower-than-expected growth," causing the company to backpedal. 

Perret said: "The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth. I made the decision to hire and invest ahead of revenue growth, and the current economic slowdown has meant that this revenue growth did not materialize as quickly as expected."

All impacted employees will get 16 weeks of base pay in severance. Those who have been with Plaid for more than one year will get additional weeks. Plaid will also be paying the cash equivalent of six months of healthcare premiums for medical, dental and vision insurance coverage for employees and their dependents. In a practice that is becoming increasingly common, the company is also accelerating equity grants for employees who worked at the company for more than one year to the February 15, 2023 vesting date. It is also waiving the one-year cliff for workers with equity who haven't yet reached their one-year vesting cliff.

Additionally, it says it will provide six months of career support and coaching services as well as six months of continued mental health coverage for all departing employees. The company also says it has "dedicated immigration counsel" for those on a work visa.

Affected employees lost access to many Plaid systems in a move that Perret acknowledged may seem "abrupt" but that he deemed necessary "given the sensitive nature of data" in its industry.