Digital Bank Chime Cuts Costs Across the Board Including 12 Percent of Staff

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Chime Lays Off 12% of Workforce, or About 160 People

In a move that reflects the current market conditions, digital bank Chime has confirmed that it is laying off about 12% of its workforce, which translates to approximately 160 people. This news was first reported by The Information.

Co-Founder’s Memo Explains Layoffs as Part of Company’s Strategy for Thriving in Market Conditions

According to an internal memo obtained by TechCrunch, Chime co-founder Chris Britt explained that the decision to lay off employees is one of several measures aimed at helping the company thrive regardless of market conditions. In the memo, Britt stated that he and co-founder Ryan King are re-calibrating marketing spend, decreasing the number of contractors, adjusting workspace needs, and renegotiating vendor contracts.

"The changes will help us, but we also need to adjust the size of our organization as we increase our focus and forge our path to profitability," Britt wrote in the memo.

Chime’s History of Achievements

Since its inception in 2012, Chime has raised a total of $2.3 billion in funding, according to Crunchbase. The company reached EBITDA profitability two years ago, which is a significant milestone for any fintech startup. Its latest public valuation was $25 billion.

Market Uncertainty and Company’s Strategy

The co-founder added that the startup is "well-capitalized" but noted that financial market uncertainty was a factor in these changes. A spokesperson for Chime reiterated this perspective, stating that as the company looks at current market dynamics, it is adjusting its organization to be fully aligned with its priorities.

Comparison with Other Fintech Startups

This move by Chime follows a trend observed in other fintech startups. For instance, corporate spending startup Brex cut 11% of staff after being valued at $12.3 billion earlier this year, citing the challenging macroeconomic environment.

Shifting Tide of Tech Layoffs

According to layoffs.fyi, nearly 70% of people who have been laid off this year lost their jobs during May, June, July, and August. Since then, staff cuts have decreased. September had half the number of layoff events than August, and in October, new layoff events slowed while the number of impacted individuals slightly increased from August.

November’s Start: Not-So-Great

While November is off to a not-so-great start, considering Chime’s cuts and Opendoor’s 18% reduction that happened just hours ago, the data brings some hope.

Conclusion

Chime’s decision to lay off about 12% of its workforce reflects the company’s efforts to adapt to market conditions. The move is part of a larger strategy aimed at helping the company thrive regardless of external factors. As fintech startups continue to navigate the challenging macroeconomic environment, it will be interesting to see how Chime and other companies respond to the changing landscape.

Natasha Mascarenhas Senior Reporter

Natasha Mascarenhas is a senior reporter at TechCrunch, covering early-stage startups and venture capital trends. She has over 5 years of experience in reporting on the tech industry.

Mary Ann Azevedo Sr. Reporter

Mary Ann Azevedo is a sr. reporter at TechCrunch, with more than 20 years of business reporting and editing experience for publications such as FinLedger, Crunchbase News, Crain, Forbes, and Silicon Valley Business Journal.