- CEO of Affirm announces the 19% cut down of staff along with the closure of its cryptocurrency program.
- Max Levchin takes full responsibility for the recent restructuring at Affirm and claims that it was a necessary yet difficult decision to make.
Affirm’s CEO and founder of the payments company has announced plans to shut down its cryptocurrency service ‘Affirm Crypto’ on March 2.
On February 8, Max Levchin, the CEO of Affirm, released a letter and an email, updating its shareholders and impacted staff about the company’s saddening decision to cut down on some initiatives and workforce. In the letter, the CEO mentioned that he would take full responsibility for all actions that led the company to this point.
“We are reducing the size of our team by 19%. This was the single most difficult decision I have had to make since Affirm’s founding, but I believe it is the right one,” Max announced in the letter.
The CEO cited that due to its rapid growth over the last few years, it hired many workers beyond its revenue, especially during the Covid-19 pandemic. Therefore, the set revenue could only partially cater to the size of the team; hence the firm decided to let 19% of its workforce go.
Affirm declared the end of the buy-now-pay-later company’s cryptocurrency program and mentioned that Affirm Crypto would no longer allow the purchase of Bitcoin (BTC) on its platform.
“On March 2, 2023, the ability to purchase bitcoin through the Affirm app will end. We will be halting the Affirm Cryptocurrency Program on March 31,” the update reads.
What happened at Affirm?
The company’s structure changed due to the unstable macroeconomic environment and dampening user spending. Max Levchin believed that despite the tragic news he had to deliver, the company was sure to rise once more as its teams focused on the right initiatives.
On its website, Affirm announced that upon closure of its Crypto program, if users left their Bitcoin in their accounts, the BTCs would be sold at CME CF Bitcoin Reference Rate (BRR), and the proceeds would be transferred to the user’s Affirm Savings account.
The Chief Financial Officer (CFO), Michael Linford, agreed with Max Levchin and commented on the firm’s restructuring scheme. He said the firm took a difficult yet decisive step towards restructuring Affirm’s cost base.
What does this mean for the future of Affirm?
According to Max Levchin, the layoff of the firm’s workforce would begin with immediate effect on February 8, and the closure of Affirm’s Crypto Program was only a part of the company’s plans to manage its revenue and keep its head afloat.
In the letter, the CEO expressed the plans of Affirm to the shareholders, claiming that the company expected to reap high gains from its restructuring programs in February.
“Upon full implementation of the cost restructuring measures we have taken in February, we expect to realize savings of $77 million to $83 million annually,” Max said.
Conclusion
Affirm, a payments provider firm announced that it would reduce its operating expenses as it hoped to achieve its long-term goals under strict and manageable revenue.
