Stripe cutting 14% of workers amid economic concerns

Grappling with high operating costs, Stripe is substantially reducing its staffing levels.

The online payments giant announced that it is laying off around 14 per cent of its workforce, which will return the company to its February headcount of almost 7,000 employees.

While the cuts will affect a number of divisions, Stripe said most will occur in recruiting.

In a memo to staff on Nov. 3, CEO Patrick Collison said the company’s leadership team misjudged how much the internet economy would grow in 2022 and 2023 — adding that they “overhired for the world we’re in.”

“We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding,” Collison said. “We think that 2022 represents the beginning of a different economic climate.”

In order to adapt appropriately to this new reality, he noted that the business needs to reduce its costs.

The latest round of cuts come just over a year after Stripe opened its first Canadian office in downtown Toronto. The company didn’t disclose how many employees in Canada could be affected.

The North American tech sector has experienced a flurry of layoffs this year.

In addition to Stripe, Twitter, RenoRun, Hootsuite, Microsoft, Meta, Shopify, Snap, Article, Unbounce, Clearco, Q4, and Wealthsimple have substantially reduced their workforces as they continue to monitor market conditions.

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Termination agreements for Stripe employees

When it comes to severance pay for affected staff, Stripe’s CEO said the company will:

• Pay 14 weeks of severance for all departing workers (more for those with longer tenure)
• Employees leaving Stripe will be paid until at least February 21, 2023
• Affected staff will receive their 2022 annual bonus (regardless of their departure date)

However, employees being laid off by the online payments giant could be owed much more compensation than this.

In Canada, non-unionized employees and senior executives at Stripe are owed full severance pay when they lose their jobs due to downsizing or corporate restructuring.

This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and B.C.

Severance can be as much as 24 months’ pay, depending on a number of factors.

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• Severance packages in mass layoffs
• Severance for technology industry employees
• Rights to severance for provincially regulated employees

WATCH: Employment lawyer Lior Samfiru explains why you are still owed severance if you have been downsized on an episode of the Employment Law Show.

Before you accept any severance offer, have an experienced employment lawyer at Samfiru Tumarkin LLP review it and your employment contract.

We can tell you if what you have been provided is fair and how to get proper compensation if it falls short of what you are actually owed.

If you aren’t given the full amount, which happens often, you have been wrongfully dismissed and are entitled to compensation.