Tech’s pandemic hiring boom continues to break as Plaid adds layoffs

Fintech firm Plaid is laying off around 260 employees, adding to a recent wave of cuts by private tech companies. CEO Zach Perret announced the layoffs in a memo sent to employees Wednesday morning, citing macroeconomic challenges over the past year.

The announcement comes amid a string of layoffs among tech companies, including Meta, Twitter, Lyft and Coinbase, among others. At least a third of the CNBC Disruptor 50 companies have announced layoffs in the past year.

Plaid ranked #47 on the 2022 CNBC Disruptor 50 list.

Stripe, an online payments company that competes directly with Plaid, laid off 14% of its workforce last month, while another fintech company, Chime, also cut 12% of its staff last month.

Overall, layoffs across the tech sector nearly doubled from October to November, and there are signs from Silicon Valley that deeper cuts are still ahead.

Plaid’s platform allows users to connect their bank accounts to fintech apps such as Venmo, Robinhood and Coinbase. The company has experienced steady growth since it first launched in 2013, with more than 12,000 financial institutions now supported by Plaid and more than 7,000 fintechs built on the service.

The company experienced a rapid increase in use of its platform by both new and existing customers during the pandemic and hired aggressively to meet consumer demand, Perret said. The company currently has more than 1,250 team members spread across seven offices worldwide, according to the Plaid website.

With slower-than-expected industry-wide growth in 2022, costs outpaced Plaid’s revenue growth. Perret also said in the note that the number of Plaid customers has grown by about 50% in the past year, and consumers using the platform have grown at a rapid pace.

Plaid’s growth had led to a valuation above $13 billion by 2021, and before that a deal was announced by Visa to buy the company, but that acquisition was abandoned after the Justice Department sued to block it.

“Today’s changes were incredibly tough, but they were also necessary,” Perret said in the note. “They will allow us to continue to operate from a position of strength so that we can best support our customers and the millions of consumers we collectively serve over the long term.”

In an email to CNBC, Plaid spokeswoman Freya Petersen said teams across the company will be affected by the layoffs, although areas such as recruiting may be more affected due to reduced headcount going into 2023. Affected employees will be offered 16 weeks’ pay, with additional weeks paid for employees who have been with the company for more than a year. Equity grants to employees of the company for more than one year will be accelerated to a vesting date in February.