San Francisco-based Brex, a company focused on developing B2B financial products, recently acquired $150 million in capital, in order to further strengthen its existing balance sheet and help it maintain operations during the COVID-19 outbreak.
Now, the company has announced (on May 29) that it will be laying off 62 workers.
The Fintech firm claims that it needs to begin restructuring its operations in order develop new products.
Brex’s founders noted in a company blog post:
“This decision means we will need to revisit investments that no longer make sense in the new reality we now live in. Some teams will unfortunately need to be reduced, some roles changed and some people asked to move teams.”
Brex’s latest funding round, which is an extension of a $100 million Series C round that valued it at around $2.6 billion last year, was acquired so that the company can “focus 100% on providing services and solutions to help [its customers] navigate these challenging economic times,” Henrique Dubugras, co-CEO at Brex, had said just a few weeks ago.
By cutting 62 jobs, Brex will be reducing the size of its workforce by 17%, according to Pitchbook.
Dubugras and Pedro Franceshi (Brex’s other 24-year-old co-founder) acknowledged:
“Three months in, it’s clear that the impact of COVID-19 won’t be short-lived. We know that the pace of growth won’t be what we expected for the foreseeable future.”
“We are restructuring the company to prioritize building over growing over the next year, and be ready to serve the new businesses that will be created as the economy recovers with a stronger product.”
Several other company employees will be moving to different teams or their roles and responsibilities might change.
When the pandemic began, Brex had used its cash reserves to acquire three companies.
There are now 467 startups that have fired more than 61,000 tech employees (Layoffs.fyi data reveals).
Brex will be providing eight weeks of pay to employees who’ve been laid off. The company says it will also waive the equity cliff for these workers, if they’ve been working at the Fintech firm for less than a year.