Alphabet-backed GoCardless to layoff 15% of its labor force

GoCardless, a London-headquartered fintech unicorn has announced the reduction of its global labor force by 15%. This equates to 135 roles and is geared towards lowering costs while working towards profitability.

The company, which was launched in 2011, processes direct debit payments like invoices and subscriptions for its business clients.

GoCardless’ path to profitability

The announced layoffs will affect roles within the US, UK, Australia, and New Zealand. This will have its total workforce drop to slightly under 800 with 25% of its senior leadership being cut off. At the same time, an additional 15 roles will be shifted to Riga from Britain.

GoCardless’ decision to reduce its labor force comes about four months after it raised funds in a Series G round. It secured $312 million at a valuation of $2.1 billion. Its backers included Alphabet’s venture capital investment arm - Google Ventures (GV) as well as BlackRock and Permira.

Notably, the move by GoCardless further points to the persistent pressure being felt by most tech startups. In fact, Atomico - a venture capital firm - has indicated that funding in this sector is set to continue dropping in the coming months. Compared to $83 billion in 2022, it is expected to decline by a further 39% to $51 billion in 2023.

Even so, GoCardless CEO Hiroki Takeuchi expressed optimism over its potential to grow fast and attain profitability despite the layoffs. In a statement, he noted, “We can see that our revenue will continue to grow strongly, and the changes we are announcing today will get us within touching distance of profitability in the near future.”

He further indicated that the firm’s business strategy will not “fundamentally” change. In essence, it is part of the firm’s plan to lower its costs by 15%.