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Affirm CEO admits he “acted too slowly” as 500 job cuts are announced

By Nithya Bose in US business news, posted February 9, 2023

Fintech company Affirm has announced 500 job cuts, representing 19 percent of its workforce, as more companies cut their costs amid economic uncertainty.

The company went on a hiring spree during the early part of the pandemic and is now looking to reduce operating expenses.

The cuts come after consumer spending lost momentum and interest rates rose over the past three quarters.

CEO Max Levchin said: “The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded.”

He told employees that laid-off workers in the US would be offered a minimum of 15 weeks base pay as severance plus an additional week per year of tenure.

Affirm would spend between $35 and $39 million in restructuring costs.

Those affected will also get a $5,000 health stipend regardless of enrollment status, covering six months of employee healthcare.

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Levchin mentioned employees outside the US would receive severance and healthcare benefits “in line with local practices.”

He added laid-off workers could keep their Affirm-issued devices to aid them in their job search, and they could access three months of career advising and an alumni directory.

The company will vacate a portion of its San Francisco office and is considering whether to keep its lease.

It expects to incur noncash expenditures of about $11 million as a result.

Affirm’s restructuring plan is expected to be fully implemented by the end of June.

Source: The Wall Street Journal

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