Financial services company Plaid has reportedly announced that it is laying off 20% or 260 employees from its workforce. According to sources, the San Francisco-based startup's engineering team will be severely affected.

The layoff at Plaid comes during an unusually tumultuous year for fintech startups. Recently, Stripe, and Chime also laid off nearly 12% of their staff or some 160 employees.

Upon being quizzed, a company's spokesperson did not provide details on how many employees will be impacted. However, it was learned that as Plaid plans to update headcount goals, divisions like recruitment are slated to be affected more than others.

In a recent letter posted on the company's website, Zach Perret, Plaid's CEO and Co-Founder stated that during COVID-19, the company saw a massive increase in usage from its existing investors, several new customers, and significant revenue acceleration. Not to mention, to meet the customers' expectations and invest in new products, the firm hired aggressively. However, the recent shift has led to Plaid customers facing slower-than-expected growth, which left the company with no other option but to backpedal.

If sources are to be believed, all the employees will receive additional 16 weeks of base pay in severance. In addition, those who have been with Plaid for more than one year will get additional few weeks' pays. Besides, the firm will also pay the equivalent of six months of healthcare premiums for dental, vision, and medical insurance coverage for employees and their dependents.

According to Plaid, it will also provide six months of coaching and career support services along with six months of prolonged mental health coverage for all the leaving employees. The company has also dedicated an immigration counsel for those on a work visa.

For the record, the impacted employees lost access to several Plaid systems in an effort that, according to Perret, may look abrupt but was necessary, considering the sensitive nature of data in the industry.

Source credit - https://techcrunch.com/2022/12/07/plaid-layoff-fintech/