Shulou(Shulou.com)11/24 Report--

According to news in the morning of February 9, Beijing time, Affirm, a US financial technology company, announced on Wednesday local time that it would lay off 19% of its staff. Meanwhile, the company reported second-quarter earnings that fell short of analysts' expectations.

The company's shares fell more than 17% in after-hours trading.

In a letter to shareholders on the same day, founder and CEO Max Levchin called the decision "the most difficult" of all layoffs made by the company and said the layoffs would take effect on the same day.

In June 2022, Affirm said it had 2552 employees, meaning the job cuts would affect about 485 people.

A message sent to employees by Lefchin earlier Wednesday was later made public. In the letter, Lefchin said that in the early days of the COVID-19 pandemic, the company "consciously recruited in advance before supporting the revenue growth needed for team size", which justified the strategy.

"everything changed in mid-2022," Lefchin said, noting that the Fed's policy "curbed consumer spending and significantly increased Affirm's borrowing costs."

"the most fundamental reason for our situation today is that I was too slow at the beginning of macroeconomic changes," Levchin wrote. "

According to Refinitiv, the company lost $1.10 a share in the second quarter of 2023, while analysts expected a loss of 98 cents a share. The company's second-quarter revenue was $400m, below analysts' expectations of $416 million, according to Refinitiv.

Mr Levchin told shareholders that the company expected the number of employees to be "basically flat for the foreseeable future".

"in the second quarter of 2023, we shifted the vast majority of our R & D work to profit margin projects, repetitive consumer engagement and Debit + products, and plan to continue to implement this priority roadmap for several quarters," Lefchin said.

Lefchin told employees that employees laid off in the United States will receive at least 15 weeks of base pay as severance pay, with an additional week of base salary for every year of service. Laid-off American workers will receive $5000 in health benefits, including six months of employee health insurance, regardless of their employment status. America. Lefchin said non-American employees will receive severance pay and medical benefits "in line with local practices."

Employees who rely on employer-guaranteed visas will continue to be employed by Affirm until April 30, and they will have access to one-on-one advice from Affirm immigration lawyers, Lefchin said.

Levchin also said that laid-off employees can keep the equipment issued to them by the company to help them find a job, and they can get three months of career counseling and alumni list.

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