Fintech layoffs round-up: 18 August 2017
A distinctly cheerless round-up as we highlight some key moments regarding fintech layoffs. Features Simple and Royal Bank of Scotland (RBS).
US-based digital banking service Simple has fired 33 staff members (about 10% of its workforce), including several executives, according to The Oregonian. Simple’s CMO, chief people officer, VP of operations, and VP of engineering were all let go. In a blog post (16 August), CEO Joshua Reich doesn’t mention the job cuts, but says: “We have been focused on growth instead of innovation. We have been acting like a bank instead of a technology company. And that changes today.”
As reported in April, Simple discovered that moving accounts to its parent bank’s application programming interface (API) was not that simple. While in February, BBVA Compass unveiled a “goodwill impairment” charge of $60 million in its latest financial results, attributed to its direct banking service subsidiary, Simple. BBVA took similar charges related to Simple in 2015 ($17 million) and in 2014 ($12.5 million). Thus, the total write-down stood at $89.5 million, since BBVA’s acquisition of Simple three years ago.
In the UK, the Unite trade union reveals that RBS has told staff that it will be cutting a further 40% of permanent roles from its London IT function by 2020. Unite understands that this, coupled with the 65% reduction of contractors, will total a reduction of 880 people. Unite calls this restructuring and offshoring work as “wholly unacceptable”. In 2016 RBS employed 2,200 IT workers but by 2020 it says there will be 950 full-time jobs.
This latest announcement follows the job cut reports in June, May and March. Back in February, RBS’s poor financial results led to its CEO calling for more cost reductions and a faster digital transformation. The bank reported an operating loss before tax of £4.08 billion for 2016 and an attributable loss of £6.95 billion, which included litigation and conduct costs of £5.86 billion, restructuring costs of £2.1 billion, and other depressing stats.