Stripe Cutting Headcount by 14% as It Readies for 'Leaner Times' (bloomberg.com) 36
Stripe, one of the world's most valuable startups, will cut more than 1,000 jobs as it seeks to rein in costs ahead of any economic downturn. From a report: The payments company will cut its workforce by 14% this week, returning headcount to the almost 7,000 total from February, co-founders Patrick and John Collison said in an email to staff seen by Bloomberg News. The two vowed to trim expenses more broadly as they prepare for "leaner times."
"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," the Collison brothers said in the email. "We grew operating costs too quickly. Buoyed by the success we're seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in." Stripe and its publicly traded rivals have seen valuations drop as the growth in online spending slowed in the aftermath of the pandemic, just as supply-chain disruptions and once-in-a-generation inflation also hurt activity. The company in July told staffers that an internal valuation for the company dropped to about $74 billion, compared to the $95 billion it received in its most recent fundraising.
"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," the Collison brothers said in the email. "We grew operating costs too quickly. Buoyed by the success we're seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in." Stripe and its publicly traded rivals have seen valuations drop as the growth in online spending slowed in the aftermath of the pandemic, just as supply-chain disruptions and once-in-a-generation inflation also hurt activity. The company in July told staffers that an internal valuation for the company dropped to about $74 billion, compared to the $95 billion it received in its most recent fundraising.
Redundancies (Score:2)
De re-dun-dun
De dun-dun-dun
De doer-a-loer-de-dun-dun-dun
De re-bloody-bloody-bloody-dun-dun-cies
Bring in ro-bots and watch them toil
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Stripe: The beatings and firings will stop when moral improves!
"most valuable startups" (Score:2)
Most overvalued startups. "Most valuable startup" is not a thing, if they were valuable, they would no longer be a startup.
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If you valued a startup like most companies, two times annual sales, no startup would ever exist past year one. What is the general rule for startups these days? Value is 100x annual sales? Because that makes sense?
CEO n Boards playbook (Score:2)
Most what what? Vote parent up (Score:2)
> Stripe, one of the world's most valuable startups
Yes, if you're a new-slashdot editor that's right. Otherwise NO Stripe is NOTHING NOBODY EVER CARES ABOUT.
Parent wrote:
> Most overvalued startups. "Most valuable startup" is not a thing, if they were valuable, they would no longer be a startup.
Nailed it.
Slashdot - since your last acquisition YOU are the overhyped company with the IDIOT editors who pretend you have "stories". This is one such example.
Hire a real editor and stop wasting the time of YO
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...if they were valuable, they would no longer be a startup.
And aside from that, Stripe was also founded in 2010, barely a year younger than its main rival Block (Square). Last I checked the very definition of a startup company included being a new business.
Over a decade old is downright venerable in the tech world, never mind fintech.
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Agreed. But if they re-invent themselves every 3 months, they could remain a new company in perpetuity!
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And if they can lay off 1000, they're too big to be a startup instead they're a pre-IPO company.
That's a lot of people. (Score:2)
What does Stripe do that needs 7000 people? Respectful question. And... in the interests of not being one of those guys who asks the forum to gather the information and cater to me, I looked into it myself.
Okay, as "payment" companies go, that's a pretty thorough set of offerings. I understand it... partially. Still seems like a lot, but just to be active in so many countries (and under so many language needs) takes a lot. Not everybody is a poluglot.
As they admit... grew too fast.
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Re: That's a lot of people. (Score:2)
Stripe powers the underlying payments infrastructure for a good chunk of the worldâ(TM)s financial services institutions. That requires people for customer service and support as well as dedicated engineering capacity. With each country they operate in, they need teams of regulatory, risk, and legal professionals for BAU operations. 7000 is just internal labor. They likely have have another few thousand heads of contingent labor coming from contractors and consultancies for their run-book while the eng
Yet another company CREATING leaner times (Score:2)
Re:Yet another company CREATING leaner times (Score:4, Interesting)
Kinda of. But startups really do have a problem right now with rising interest rates.
Their "investors" can now put money into things that actually reliably make money, and no longer have to put their money into risky ventures. The reason there was so much 'free' money was because it actually cost them to put their money in the bank, so not spending money was a net loss, even if you spent it on something you might not ever see a ROI on.
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Kinda of. But startups really do have a problem right now with rising interest rates.
Well since Stripe was founded over a decade ago, I think we can all stop allowing the word "startup" to be abused, especially when it comes to giving this company more excuse to literally pre-fire their employees ahead of a projected recession.
Also known as fucking causing one.
Parent was 100% correct.
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No, it's just another investment money sewer that isn't panning out. Nothing to see here, most startups flop.
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the goal is explicitly to bankrupt more of us [twitter.com].
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What an absurd misunderstanding of finance. One of the major goals of the FED is to control inflation which is out of control ATM. One of the ways to do that is to pay down debt (on a society wide scale). The reason for this is how money is created (it is created when debt is created). Its is counterintuitive but it is how it works. However, many consumers are instead of paying down debt are spending the money instead. This is probably a bad idea right now but people are doing it anyway. That's what t
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What an absurd misunderstanding of finance.
It's literally what's being said.
However, many consumers are instead of paying down debt are spending the money instead.
Yes, they need to eat, pay bills and so on. They can't afford to pay down their debt when they're not making enough to live on.
This is probably a bad idea right now but people are doing it anyway.
Yeah, eating is a bad idea. Then you have to hear boomers talk about avocado toast while you eat mac and cheese.
That's what the FED is talking about in that quote.
The quote where they're literally saying people have too much money?
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I really don't see how else you think this should play out. During Coronavirus people accumulated a bunch of savings (on paper) due to reduced consumption, yet production (GDP) declined. More IOU's (money) and fewer people working to fulfill them equals inflation.
Look at this spike in savings [yimg.com]. You look at a spike like that and think it's sustainable? Those big balances were never real. When everybody's
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I like how the C-suites (Score:2)
Why do we let people do this to us? I mean, there's a lot of folks on this forum OK with this, and
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It's an intricate topic. Inflation is not going well for the West right now. There is still to much money in circulation and it's keeping inflation high. Part of this is the employment rate. If more people are unemployed then spending will drop as well. Add in rising interest rates and companies that have debt are likely trying to find ways to free up money to cover it.
Payroll tends to be the most flexible cost and the greedy bastards always want to get more for less in this area.
It's times like these I'm s
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If more people are unemployed then spending will drop as well.
While it is true that some spending would drop then, it is also true that those newly unemployed folks would need to take out more debt to pay the rent. This creates more money in the system which increases inflation. The last thing the FED wants right now is to increase unemployment. They want people to use that money to pay down their household and corporate debt, which they are not doing right now. Consumers spending money and businesses cutting employment are the exact opposite of trends that the FE
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They printed money for nearly 10 years to come out of the last recession (or more precisely, to prevent the banking system from collapsing). The limits of 0% interest rates and quantitative easing seem to have been reached. We now have a massive universal asset bubble reaching out over real estate, stocks, commodities, etc. There is now so many business flush with money that critical services are running out of personnel to hire. If you let inflation run it's course and keep 'growing' the economy, you can d
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Inflation is bad for almost everyone. Especially the poor, and also with retirees. No one likes inflation. A recession can be a lot better than full blown inflation. So you're getting paid more but prices are going up faster than your pay. Demand is higher than supply. And you can't blame it on any single politician (well, maybe Putin but is a dictator really a politician?). No matter which party stays in power in US or Europe, the solution will remain the same - raise interest rates, try to stop the
The re-beginning of off-shoring (Score:1)
I would not be surprised if there's "quiet" off-shoring going on here, eliminating US jobs, and picking up the slack with contracts with tata.
Start-up? (Score:1)
Doing it smarter than some (Score:2)
Notable, I think, for giving people a good redundancy package - there's nothing there where anyone misses out on anything they were expecting in the next few months. It reminds me of the layoffs at a previous employer, at least the earlier ones: very generous package, because they didn't want people they wanted to retain deciding to flee for the exits.
Compare and contrast Elon Musk, who doesn't care who leaves or stays at Twitter, because he's not very good at CEOing.
Whether Stripe then finds that they have
... thus contributing to .. lean times (Score:2)
Seriously - these businesses cutting proactively ahead of "lean times" I get it they want to maximize profit but geez - talk about a self fulfilling prophecy - oh hard times ahead - lets do layoffs.. and make the horrible world we are worried about .. happen