Interestingly, many of these startups claimed it was unrelated to Covid-19. But there are grounds to think otherwise…
“It wasn’t Covid-19, I swear,” say fintechs from Latin America
In Créditas’ case, the fintech stated it was due to underperformance that it fired staff earlier this month. But I find it rather odd given that little over a month ago it was planning to hire 2,000 new staff members. Its HR must be quite busy.
- Related article: Fintech Creditas to hire 2,000 and offer new services in 2020
Neon for its part reported that it reduced its staff by “less than 10 percent.” But, it also argued that these adjustments were planned due to performance evaluations. However, there’s speculation that another part of these layoffs was related to services for small and medium-sized enterprises (SMEs) that have been hit hard by Covid-19.
“During the economic downturn, we made adjustments in several areas,” stated the fintech. “The cuts represent less than eight percent of the workforce, of around 1,000 people.”
No doubt fintechs understand that users’ behavior has drastically changed in a matter of weeks. What’s more, the situation is not poised to improve in the coming months.
So rather than wait for things to get worse, layoffs are a necessary but unpleasant part of the job to ensure startup survival.
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