Home Investments The European FinTechs Bucking the Layoffs Trend

The European FinTechs Bucking the Layoffs Trend

by Ozva Admin

Around the world, the once-unstoppable growth of technology companies has been challenged by successive waves of layoffs, with sectors whose strength is tied to consumer confidence bearing the brunt.

In Europe, the e-commerce space has been one of the hardest hit. Among the major players in the European market, such as Gorillas, Getir and Zapp, thousands of jobs have been cut this year.

Related: Pink Slips rise as ultra-fast grocers face global challenges

Also related: German delivery service Gorillas cuts 300 jobs

Without the armies of delivery men that e-commerce companies employ, the worst FinTech layoffs are often in the hundreds rather than thousands. But it’s hard to compare the two, and Europe’s FinTech job losses still represent a significant blow to the continent’s tech ecosystem.

See also: Losses of fast-moving supermarkets increase in the face of an uncertain future

Some of the worst cases include Klarna, which announced it would cut its global workforce by 10% in May, a move that will be felt most at the company’s headquarters in Stockholm.

Learn more: Klarna faces growing pains as losses mount

Meanwhile, Vienna-based crypto firm BitPanda revealed in June that its headcount would be cut to 730 people, which is about two-thirds of its previous headcount.

Other European FinTechs that are shrinking their employee base include digital bank Nuri, trading platform FreeTrade, and digital wallet aggregator Curve.

there is a silver lining

However, despite the gloomy outlook, some FinTechs appear to be bucking the global trend, seizing the opportunity to invest in new talent.

In a recent first-half earnings call, Ingo Uytdehaage, CFO of Amsterdam-based payments company Adyen, told investors that the company had expanded its workforce by 400 people in the first of this year, the half of whom were placed in technology positions.

Keep reading: Growth in Europe slows, but EMEA remains a key region for Adyen

On the England channel, one of the UK’s top challenger banks, Starling, is in the midst of a hiring spree despite an announcement that the company was cutting its European expansion plans in July. At the time of publication, there were over 180 job vacancies at neobank listed on the popular job board, Indeed UK.

More on this: UK FinTech Starling Scuttles EU Banking License

In Southampton, where its engineering and operations teams are based, Starling even wrapped six double-decker buses in advertising as part of a plan to hire 100 new employees for its city offices. This is no surprise, since the FinTech firm has pointed out that “the city’s growing and qualified labor market [and] its reputation as a thriving tech hub” as key factors behind the decision to settle there in 2019.

invest in the future

In the end, what Adyen and Starling have in common is that they are both profitable businesses with established user bases and relatively predictable revenue streams.

Unlike early-stage FinTech startups that rely on venture capital investment to sustain their operations and spur growth, Adyen is publicly traded and posted a net profit of €282.1 million ($287.1 million). in the first half of 2022. It is a margin that gives the Scope of the Dutch payment company to invest in the talent necessary to continue innovating and developing new products.

Starling, on the other hand, has yet to go public, but is certainly well on its way to an initial public offering (IPO). In November last year, the company’s chief executive, Anne Boden, told reporters that an IPO was “within a year or two,” adding that in terms of IPO location, London “would be the option.” default unless we are convinced otherwise.

Plus, having posted its first full year of profitability in July, Starling doesn’t need to seek more funding rounds just to keep the business going. The bank fixed that its most recent fundraising of £130.5 million ($151.7 million) from existing investors in April went toward building “a war chest for acquisitions.”

And with Starling looking to expand its banking-as-a-service platform, Engine, the new money can’t hurt its research and development programs either.

More on this: 5 things to know about Starling’s banking as a service product, Engine

Finally, with other companies laying off staff and implementing hiring freezes, recruiting campaigns face less competition and there is a greater opportunity to recruit recently laid-off but qualified talent who are eager to find a new professional home in this difficult economic environment.

And for companies that go against the grain, despite current macroeconomic headwinds and a potential European recession, the decision to hire now may well pay off in the long run.

For all PYMNTS EMEA coverage, subscribe to the journal EMEA Newsletter.


On: Findings from a new PYMNTS study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed responses from 9,904 consumers in Australia, Germany, the United Kingdom, and the United States. US and showed strong demand for single multifunctional super apps instead of using dozens of individual apps.

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