Digital Bank Chime to Cut 12% of Staff

Digital bank Chime is cutting staff in what it says is a move to ensure the long-term success of the company.

“Today we made the incredibly tough decision to part ways with 12% of our team,” a company spokesperson told PYMNTS Wednesday (Nov. 2).

In an emailed statement, the neobank said that it is focusing its organization to align with priorities based on current market dynamics.

“As a result, we are eliminating some positions, while still hiring for select others,” the spokesperson said. “We remain very well capitalized, and these steps will continue to position us for sustained success.”

Chime has 1,300 employees, meaning the layoffs would affect 156 workers.

The company began the year preparing for an initial public offering that would have reportedly valued Chime at nearly $40 billion. It had previously been valued at $25 billion in a $750 million funding round last August.

See also: FinTech Winter Chills Funding as Busted IPOs Litter Landscape

However, Chime decided in February to put its IPO on hold. The rest of this year has seen a “FinTech winter,” according to PYMNTS data. Last month, our FinTech IPO Index, year to date, was off by more than 45%. We found that just two of our more than 40 names traded higher than their IPO price: Bill.com and Futu Holdings, both up in the triple digits in October. The remainder traded as busted IPOs, which showed just how sour the markets have grown.

Chime’s news came one day after Intuit said it was pausing hiring at its Credit Karma unit in response to a slowdown in revenue at the personal finance company as consumers face tough times and lending activity stagnates.

Credit Karma has seen its sales growth slow from 48% in this year’s third fiscal quarter to the 10% to 15% anticipated by the company for fiscal year 2023.

“Like most companies, Credit Karma is keeping a close eye on the current economic conditions, and we have gotten more conservative with our hiring,” a spokesperson said. “We are still hiring for some open roles, but this move allows us optionality as a business.”