Diving into the state of fintech layoffs and hirings

More than 3,570 fintech employees have been laid off this year alone as companies struggle to raise funding or make cuts to lengthen the amount of time they can weather the current slowdown, according to data from Layoffs.fyi.

Why it's the BFD: Based on conversations with industry watchers, the current state of the fintech job market has flipped on its head compared to last year, making it easier for companies to hire and harder for employees to negotiate bigger compensation packages.

Yes, and: The numbers will get worse, with many companies still keeping quiet on their own planned layoffs, says Scott Fletcher of crypto-focused executive search firm Intersection Growth Partners.

• In particular, employees at businesses that got over their skis last year in terms of raising funds are now getting the hardest hit.
• Mirroring the current funding environment, Fletcher says, growth-stage companies are most aggressively pulling back on hiring or laying off workers.
• Think Coinbase, with its rescinded offers, or Robinhood laying off 9% of its workforce.

Yes, but: Companies that are well-capitalized are in a position to snap up laid-off talent. Companies are also turning from hires that can help them IPO to hires that can help them reach profitability, says Jonathan Pomeranz of fintech and crypto-focused True Search.

• Early-stage businesses, for instance, remain well-capitalized.
• Meanwhile, employees are more willing to join companies they would have considered boring last year. "Talent is more interested now in PE-backed, non-sexy, non-shiny companies that they used to sneeze at," he says.
• Pomeranz also notes a greater focus on hiring an "adult in the room," a COO who can again bolster the bottom line figure rather than the top.
• While Pomeranz has not yet seen a slowdown in hiring, he says he is advising clients “they don’t have to be as aggressive” with the compensation packages

Meanwhile, even among well-capitalized younger companies, the current state of the macro economy is making founders more cautious. Payroll API startup Finch, for instance, announced a $15 million Series A round this week.

• CEO Jeremy Zhang says that, last year, the company had modeled itself to reach 65 in headcount by the end of 2022.
• If the current environment persists, though, Finch is modeling 55 instead. That is still up from its current 36 headcount, but certainly represents a more careful growth.

Of note: Layoff.fyi's figures also probably underestimate the total number of layoffs, as it relies on reporting from a largely English-speaking audience.

Bottom line: The market is tighter than it was last year, with signs that it could get tighter still.

• "It's a spectrum," Fletcher says. "But over the next three months, there’s going to be more firing than hiring."