Fintech Startup Aspiration plans to lay off more than half of its employees
California-based fintech Aspiration plans to let go of 180 employees in a company-wide restructuring.
The reduction in effect will affect both remote employees and employees based at Aspiration’s headquarters in Marina Del Rey, California. Aspiration’s last layoff was in December, when the company cut around 100 employees. The company declined Forbes’ request for comment.
“The layoff is necessitated by the need to streamline and restructure operations in light of current economic conditions and the limited capital available to the company,” said a worker adjustment and retraining notice letter submitted by the company and signed by CEO Olivia Albrecht. “The company is saddened to have to take this step.” The letter says the layoffs will begin May 26 and lists specific positions to be cut. (The federal WARN Act generally requires workers to be given 60 days notice in advance of major closings and layoffs. California has its own separate WARN Act.)
Aspiration launched in 2013 as an environmentally conscious digital bank that allows customers to round their purchases up to the nearest dollar for donation to tree-planting nonprofits. Specifically, the layoffs will include Aspiration’s CEO, Deepak Kumar, who oversaw the company’s consumer banking operations, including risk management and customer service call centers, according to his LinkedIn profile.
The neobank business model has proven more difficult than it seemed at the height of the pandemic, as digital services rose in popularity. Over time, many digital banks found that the cost of acquiring new customers was too high compared to the revenue they could generate from them.
In late 2021, Aspiration began to shift away from digital banking and towards selling carbon credits to businesses. The carbon offset market is based on the idea that companies can reduce their carbon footprint by financing projects that remove carbon from the atmosphere.
The layoffs span departments including product management, software development, customer engagement and more. Another manager affected by the layoffs is Aspiration’s chief of staff. News of the layoffs was first reported by the St. Louis Business Journal.
In 2021, Aspiration announced plans to go public through Special Purpose Acquisition Company (SPAC) Interprivate III Financial Partners Inc. The IPO deal deadline has been delayed three times, first to December 31, 2022, then to March 31, 2023, and most recently to March 1, 2023. May 2023. It is currently the second-longest outstanding SPAC deal on the market, according to Julian Klymochko, CEO of asset management firm Accelerate, which invests in the SPAC.
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