Regulatory pressure, rising rates, consumer stress and other factors made life difficult for many fintechs in 2023, leading to layoffs after several years of strong performance and hiring.
Fintechs had to cut expenses as revenue and funding from investors slowed down. For many companies, including online lenders, software providers and payment platforms, those savings came in the form of layoffs.
Online lenders that sell their loans to investors struggled to find buyers, as rising rates made other investments more attractive, and borrowers faced more challenges. Companies like LendingClub and Upstart, which both trimmed their staff this year, are operating more leanly as loan originations have dropped, said Vincent Caintic, an analyst at Stephens.
"The main driving factor is that the origination volume at many fintechs has been shrinking considerably since the heyday of 2021," Caintic said. "The shrinking of their origination volume has generated lower profitability or in some of the cases, losses for those companies."
Additionally, regulatory inspection of offerings like banking-as-a-service and buy now/pay later increased stress for fintechs in those niches, in some cases limiting clients and business.
Here's a list of some of the fintechs that laid off employees in 2023: