Finance firm, Unit, announces redundancies for 15% of its workforce.
In a recent company blog post, the fintech firm Unit announced a 15% staff reduction, joining a growing list of financial technology companies making similar moves.
Founded in 2019, Unit was established to build infrastructure that enables banks and technology companies to enter direct relationships. In the past five years, the company has grown significantly, now boasting eight bank partners and working with high-growth start-ups and publicly traded companies. As of the first quarter of 2024, Unit serves 1.38 million end-customers with an annualized transaction volume of $28.7 billion.
The co-founders of Unit, Itai Damti and Doron Somech, cited slower than expected revenue growth and plans to become profitable without additional capital raises as reasons for the cuts. They believe that the company will achieve profitability without the need for further capital infusions.
The co-founders also stated that the changes they are making will further solidify the company's strength due to maintaining a large balance sheet. According to PitchBook, Unit had 172 employees in 2023, meaning the 15% cut amounts to about 25 employees.
This decision comes amidst increased regulatory scrutiny in the fintech industry. The co-founders believe that the company needs to think in longer time frames to navigate these challenges effectively.
The fintech sector has been experiencing a wave of job cuts, with companies like Treasury Prime, Paxos, Klarna, UBS, Banque Havilland, and IHAG all announcing layoffs this year. Some companies, like Klarna, are focusing on gradually replacing outsourced customer service staff with more efficient AI-driven processes while still emphasizing technology use to improve efficiency.
Despite the challenges, Unit's product, a quality infrastructure, remains in high demand. Banks are using Unit's services and white-label app to power their own bank-branded digital experiences.
In May, Unit's CEO, Itai Damti, addressed the increased regulatory scrutiny fintech faces and the costs Unit has incurred to rise to the occasion. The company's blog post did not mention any purchase licensing rights. The cuts were announced in the blog post on June 17.
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