Stripe is laying off roughly 14% of its staff, CEO Patrick Collison wrote in a memo to staff Thursday.
The digital payments giant is struggling with rising inflation, fears of a looming recession fueled by higher interest rates, energy shocks and tighter investment budgets. “2022 represents the beginning of a different economic climate,” Collison said in the memo.
“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” Stripe’s founders said, adding the company over-hired staff and grew operating costs too quickly.
Valuated at $95 billion, Stripe became the most valuable U.S. startup last year. According to the Wall Street Journal the San Francisco-based company lowered its internal valuation in July to $74 billion amid economic uncertainty.
Stripe said its head count will be reduced to about 7,000 employees, which means the layoffs will impact roughly 1,100 people. Most of the cuts will be in the recruiting area, as the company plans to hire fewer people next year.
Minutes after Stripe’s announcement, Lyft said it will lay off 13% of its staff, or nearly 700 employees, as the company rethinks staffing amid rising inflation and fears of a looming recession.
In a memo to staffers on Thursday, Lyft co-founders Logan Green and John Zimmer said the layoffs will impact every part of the company, and pointed to broader macroeconomic challenges that led to the cuts.