Payments company Paddle has made 8% of its workforce redundant, which it blames on the current inflationary market and needing to hunker down for survival.
The company’s founder and CEO, Christian Owens, published an internal memo explaining the cuts via LinkedIn.
It stated that Covid-19 helped Paddle increase transaction volume by over 3.5-times, as more companies looked to leverage digital tools.
However, the market has now shifted with higher interest rates and a change in investor sentiment away from growth technology companies.
Ownes asserts that Paddle is ‘well positioned’ to overcome the challenges, with a strong balance sheet and products that are still critical for the market. The market has forced the company to step back from the growth efforts it was making in 2022, which included the acquisition of ProfitWell and the launch of new products.
During 2023, Paddle will be focused on making achievable goals, whilst controlling and managing its costs.
In the post, Owens admits two key mistakes that led to the redundancies.
“The first was assuming that the growth our customers saw during Covid was a signal of fundamental change and that growth would be sustained largely in perpetuity. The second was allowing our operating costs to increase at a faster rate than we were growing our revenue.”
Other measures to reduce cost include limiting hiring to critical roles, reducing budgets for promotions and salary increases, and reducing discretionary spending on software, tooling and people.
Those made redundant will receive 13 weeks full pay, six months membership to their current health plan, stock options and career support.
Paddle is a payments, tax, and subscriptions solution for SaaS. Its technology is used by B2B and B2C software companies offload operational complexities, it said.
Paddle is not the only FinTech having to cut down its team. Earlier this week, Australian PayTech company Till Payments laid off 40% of its staff.
It blamed the 120 redundancies on inflationary pressures and a shrinking global economy. Alongside this Till Payments added three new board members, which is believed to be a sign it is still seeking to launch on the Nasdaq in the future.
Till Payments provides businesses of all sizes with tools to accept payments, whether that is online or in-person.
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