Discover your dream Career
For Recruiters

Fintech layoffs are far from over: This is how you protect yourself from them

As funding dried up for fintechs across 2022 and 2023, more than 100 of them laid off staff. In 2024, there was hope that things would change, but the reality seems much more grim.

Click here to sign up for our fintech newsletter 🤖

Just last month, TechCrunch noted that at least six major fintechs made layoffs. PayPal, which had a company-wide layoff round in January, has continued trimming. 

These are unlikely to be the last job cuts. The latest global fintech report from Boston Consulting Group and VC firm QED Investors states that "many fintechs have yet to apply [cost reduction practices] comprehensively." The report says that these practices range from "increasing automated decision-making regarding key processes" to large-scale organizational redesigns.

Cost cuts won't always mean job cuts; the report notes that salaries and wages make up just 35% of the cost structure for the average publicly traded fintech (compared to 60% for banks). Private fintechs, however, face an uphill struggle.

Fintechs that raised money in the industry's heyday are living on borrowed time. The venture capital firms funding them are focused on which might actually turn a profit. The report says that just 5% of challenger banks are profitable, despite this being the top sector of fintech for revenue growth from 2021 to 2023. BCG says funding fell 71% for the fintech industry as a whole; valuations as a multiple of revenues fell 80%.

Eventually, runways are going to run out. Jack Selby, an MD at Thiel Capital, estimated that many firms had about two years of runway left eight months ago.

There's also the looming threat of AI. The report says that Buy-Now-Pay-Later stalwart Klarna is using GenAI to do the equivalent work of 700 employees, while 90% of its current employees are using GenAI in practice today. CEO Sebastien Siemiatkowski told Bloomberg TV last month that he expects headcount to fall 20% each year due to AI advances. He bases this on average tech industry attrition rates, rather than layoffs specifically, with AI reducing the necessity to hire replacements.

How to stay safe from fintech layoffs

In order to protect your job security in fintech, you need to therefore make sure you're in a safe position at a safe firm. 

The report says GenAI is "delivering huge gains" in coding, customer support and digital marketing, making them increasingly risk positions. This doesn't mean that you shouldn't be a software engineer, rather that you should ensure your role consists of more than simply coding.

Smaller fintechs thrive on hiring generalists, but specialists may have more job security at larger firms. Product designers and GTM (go to market) specialists are examples of this.

The subsector of fintech you join also matters. Revenue in crypto fell 16% from 2021 to 2023, while cross border payments firms and challenger banks saw revenues rise 42% and 78% respectively.

Some subsectors see more significant variance than others. CAGR for the top quartile of lending fintechs was 133% while the bottom quartile's fell by 23%. Financial infrastructure seems the safest bet, as even the bottom quartile saw growth of 4%.

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, Whatsapp or voicemail). Telegram: @AlexMcMurray. Or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

author-card-avatar
AUTHORAlex McMurray Reporter

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.

Boost your career

Find thousands of job opportunities by signing up to eFinancialCareers today.
Recommended Articles
Recommended Jobs
London Stock Exchange Group
Director of Finance, FX and Fixed Income
London Stock Exchange Group
London, United Kingdom
Carnegie Consulting
Head of Fund Raising - Award Winning Commodities Hedge Fund
Carnegie Consulting
London, United Kingdom
Hunter Bond
Trading Project Manager - Hedge Fund
Hunter Bond
London, United Kingdom
Carisbrook Partners
G10 STIR FX Trader
Carisbrook Partners
London, United Kingdom

Sign up to Morning Coffee!

Coffee mug

The essential daily roundup of news and analysis read by everyone from senior bankers and traders to new recruits.