It continues to rain layoffs in the finance industry. Wealthsimple, the Canadian digital wealth platform, will lay off 13% of its employees in the coming months. Like other fintech players, the firm blames market volatility for this decision.
A Rough Patch For Wealthsimple
The fintech industry – and its cryptocurrency counterparts – have very tough decisions to make in the weeks to come. Many companies experienced explosive growth in 2020 and 2021 yet now face the consequences of spending too much money. As 2022 has been a terrible year for the broader finance industry, revenue continues to dwindle, and volatile markets result in layoffs.
The trend of laying off employees has hit various big players, including Klarna and Coinbase. For Wealthsimple, it is the only viable recourse under the current market conditions. The company has 1,262 employees, of which 159 will be out of a job in the next few weeks. It is a hard decision for a company raising money at a C$5 billion valuation just a few months ago.
Moreover, Wealthsimple has been on an aggressive expansion streak to go beyond robo-advising and enter a cryptocurrency and peer-to-peer money transfer services. Unfortunately, cryptocurrencies have been incredibly volatile in 2022, losing over 50% of their value since the year started. Scaling back is a necessity for Wealthsimple and its team, and the layoffs are an integral part of that process.
It has been rough for Wealthsimple since its latest fundraising. Despite expanding its products, the Canadian digital wealth platform was forced to exit the UK and US markets. Its services have been sold off to Betterment and Moneyfarm, indicating the company may need to rethink its current market approach and strategy.
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