Fintechs face tough layoff decisions, but not all are honest about it…

fintechs face tough layoff decisions, but not all are honest about it…
fintechs face tough layoff decisions, but not all are honest about it…

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Contxto – Not even fintechs are immune to coronavirus (Covid-19). In recent weeks, three startups, Créditas, Neon, and C6 Bank from Brazil, as well as Kueski from Mexico announced layoffs.

Interestingly, many of these startups claimed it was unrelated to Covid-19. But there are grounds to think otherwise…

“It wasn’t Covid-19, I swear,” say fintechs from Latin America

In Créditas’ case, the fintech stated it was due to underperformance that it fired staff earlier this month. But I find it rather odd given that little over a month ago it was planning to hire 2,000 new staff members. Its HR must be quite busy.

Neon for its part reported that it reduced its staff by “less than 10 percent.” But, it also argued that these adjustments were planned due to performance evaluations. However, there’s speculation that another part of these layoffs was related to services for small and medium-sized enterprises (SMEs) that have been hit hard by Covid-19.

Brazilian digital bank C6 let go of 60 staff members earlier this month and was quite upfront about the reasons.

“During the economic downturn, we made adjustments in several areas,” stated the fintech. “The cuts represent less than eight percent of the workforce, of around 1,000 people.”

Over in Mexico, loaning startup Kueski too announced layoffs this week. 30 percent of its workforce—or nearly 90 jobs—were lost so as to cope with the Covid-19 pandemic. 

No doubt fintechs understand that users’ behavior has drastically changed in a matter of weeks. What’s more, the situation is not poised to improve in the coming months.

So rather than wait for things to get worse, layoffs are a necessary but unpleasant part of the job to ensure startup survival.

Wanna hear more? We recommend you listen to the following podcast episode: Detrás del mensaje. You can find the time stamp available in the description.

Related articles: Tech and startups from Brazil!


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