Stripe Inc., one of the world’s most highly-valued startups, said Thursday it is laying off about 14% of its employees and blamed the harsh economic climate.
Stripe, a payment processor to fast-growing Internet companies like
Shopify Inc.
SHOP 2.69%
and Instacart, was a big beneficiary of the pandemic-driven surge in e-commerce in 2020 and 2021.
Businesses on Stripe processed more than $640 billion in payments last year, up 60% from a year earlier. A March 2021 fundraising round valued Stripe at $95 billion.
But 2022 has been more challenging, Stripe Chief Executive
Patrick Collison
wrote in a message to employees that was also posted on the company’s website. “We overhired for the world we’re in,” Mr. Collison wrote, citing inflation, energy shocks, higher interest rates, smaller investment budgets and more stingy funding for startups.
“We do need to match the pace of our investments with the realities around us,” he wrote. “Today, that means building differently for leaner times.”
The cuts will leave Stripe with a workforce of almost 7,000, Mr. Collison wrote, meaning about 1,000 positions are being eliminated. The layoffs will disproportionately affect some teams more than others. The company will need fewer recruiters, for example, since it plans to hire fewer people in 2023.
Silicon Valley has been aggressively cutting expenses and eliminating jobs in response to slower growth.
Microsoft Corp.
,
Netflix Inc.,
Peloton Interactive Inc.
and
Robinhood Markets Inc.
have all announced job cuts this year.
parent Meta Platforms Inc. has begun quietly nudging out a significant number of staffers by reorganizing departments, while Google has required some employees to apply for new jobs.
The growth in e-commerce, Stripe’s bread-and-butter business, has slowed from a pandemic-era boom as more people shift their shopping back to bricks-and-mortar stores. Big Stripe customers like Shopify have warned investors to expect losses. Stripe itself lowered its internal valuation by 28% earlier this year, The Wall Street Journal previously reported.
Mr. Collison wrote that Stripe’s leadership made “very consequential mistakes” in recent years. They overestimated the internet economy’s growth for 2022 and 2023 while underestimating the risks of a broad slowdown, he wrote, and they increased expenses too quickly after seeing success in some new product areas.
“We are going to correct these mistakes,” Mr. Collison wrote, adding that Stripe would rein in “all other sources of cost.”
Write to Peter Rudegeair at [email protected]
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