Around the world, the once unstoppable growth of tech companies has been called into question by successive waves of layoffs, with sectors whose strength is tied to consumer confidence the worst affected.
In Europe, the q-commerce space has been among the hardest hit. Between the biggest players on the European market such as Gorillas, Getir and Zapp, thousands of jobs have been cut this year.
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Also related: German Delivery Service Gorillas Cuts 300 Jobs
Without the armies of delivery workers that q-commerce businesses employ, the worst FinTech layoffs typically number in the hundreds rather than thousands. But it’s hard to compare the two, and Europe’s FinTech job losses still represent a significant blow to the continent’s tech ecosystem.
See also: Ultrafast Grocers’ Losses Mount in the Face of an Uncertain Future
Some of the worst instances include Klarna, which announced that it was cutting its global workforce by 10% in May, a move that will be felt most at the company’s headquarters in Stockholm.
Learn more: Klarna Faces Growing Pains as Losses Increase
Meanwhile, Vienna-based crypto firm BitPanda revealed in June that its headcount would be reduced to 730 people, representing around two-thirds of its previous workforce.
Other European FinTechs that are slimming down their employee base include the digital bank Nuri, the trading platform FreeTrade and the digital wallet aggregator Curve.
There’s a Silver Lining
Yet despite the gloomy outlook, some FinTechs appear to be bucking the global trend, capitalizing on the opportunity to invest in new talent.
In a recent first half earnings call, Ingo Uytdehaage, chief financial officer at Amsterdam-based payments company Adyen, told investors that the company had expanded its workforce by 400 in the first of this year, half of whom were placed in tech roles.
Read on: Growth in Europe Slows but EMEA Remains Key Region for Adyen
Over the channel in England, one of the U.K.’s leading challenger banks, Starling, is in the midst of a hiring frenzy despite an announcement that the company was curtailing its European expansion plans in July. At the time of publishing, there were over 180 job openings at neobank listed on the popular jobs board, Indeed UK.
More on this: UK FinTech Starling Scuttles EU Banking License
In Southampton, where their engineering and operations teams are, Starling even wrapped six double-decker buses in advertising as part of a scheme to recruit 100 new staff for its offices in the city. It’s no surprise, as the FinTech firm has pointed to “the city’s growing and skilled jobs market [and] its reputation as a burgeoning tech hub” as key factors behind the decision to set up shop there in 2019.
Investing in the Future
In the end, what Adyen and Starling have in common is that they are both profitable businesses with established user bases and relatively predictable revenue streams.
Unlike early-stage FinTech startups which rely on venture capital investment to sustain their operations and fuel growth, Adyen is publicly listed and posted a net profit of €282.1 million ($287.1 million) in the first half of 2022. It’s a margin that gives the Dutch payment firm scope to invest in the talent needed to continue innovating and developing new products.
Starling, on the other hand, has yet to list publicly but is certainly on its way toward an initial public offering (IPO). In November last year, the company’s CEO Anne Boden told reporters that an IPO was “a year or two off,” adding that in terms of IPO location, London “would be the default option unless we’re persuaded otherwise.”
What’s more, having posted its first full year of profitability in July, Starling doesn’t need to pursue further funding rounds just to keep the business running. The bank stated that its most recent fundraise of £130.5 million ($151.7 million) from existing investors in April was earmarked for building “a war chest for acquisitions.”
And with Starling looking to expand its banking-as-a-service platform, Engine, the new money can’t hurt its research and development programs either.
More on this: 5 Things to Know About Starling’s Banking-as-a-Service Product, Engine
Finally, with other companies laying off staff and implementing hiring freezes, recruitment drives face less competition and there’s a greater opportunity to pick up recently redundant but qualified talent who are eager to find a new professional home in this tough economic environment.
And for firms going against the tide, despite the current macroeconomic headwinds and a potential European recession, the decision to hire now may well pay off in the long run.
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