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Brex, a US fintech agency, has reduce greater than 200 workers from its 1,000-person workforce. This transfer reveals that even a decacorn—a privately held firm with a valuation topping $10 billion—isn’t proof against job losses. The startup mentioned it’s performing some restructuring, based on an e mail despatched at this time (Jan. 23) to an worker who acquired a layoff discover.
The corporate, launched in 2007 by Henrique Dubugras and Pedro Franceschi, who each based and sold a fintech firm in Brazil, affords bank cards to startups; it’s additionally branched out into different companies, equivalent to journey expense administration. Brex, whose buyers embrace Y Combinator and Kleiner Perkins, together with PayPal co-founders Max Levchin and Peter Thiel, is valued at $12.4 billion, based on PitchBook.
The job cuts observe an earlier spherical of layoffs—totaling 11% of the workforce—in late 2022, when the corporate’s then-CFO joined its competitor Rippling.
It’s not simply Brex, although. Nicely-funded fintech gamers have been struggling as they alter to a high-interest price atmosphere. Final 12 months, Stripe—which plans to go public in 2024—and Plaid reportedly laid off 1,000 and 260 workers, respectively.
Searching for tech expertise in Latin America
The layoffs come as Brex focuses on hiring outdoors the US.
The corporate, which has workplaces in San Francisco and New York, has been recruiting in Latin America, Israel, and Canada, with an emphasis on software program engineering, based on the worker aware of the matter.
That’s a reversal of Brex’s earlier strategy—dangling money to poach workers from the Google and Metas of the world. For instance, the corporate gave new hires a selection of how a lot cash versus inventory they may take. Brex’s job board now shows postings for workers in Brazil, Mexico, and Canada that far outweigh its listings for US-based roles.
Brex is only one of many American tech firms outsourcing expertise to lower-cost international locations as layoffs maintain plaguing the business. No surprise: The median annual wage for a US software program developer is $124, 200, in comparison with $62, 306 for one in Brazil.
In November, Google revealed that it’s building a data center in Uruguay, the tech large’s second such facility in Latin America; the opposite is positioned in Chile. Google additionally introduced in 2022 that it might hire 200 engineers in Brazil, a part of a plan to bolster privateness, safety, and applied sciences that fight abusive content material.
Brex is unprofitable, dropping $16 million a month, the worker mentioned. Quartz has reached out to the corporate for remark.
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