N26 lays off 10% of New York-based workforce
N26 has lost 10% of its 90-person New York-based workforce, marking the first instance of job losses at the German challenger bank due to operational reasons, Finance Fwd reports.
The challenger has confirmed the job losses, highlight the strain coronavirus is putting on its operations. However, N26 has not made any further redundancies among its 1,500-person strong global workforce.
In April, it put 150 employees on short-time working in Berlin and Barcelona. These employees work reduced hours or get paid less than half a week’s pay.
Since the US government does not offer a comparable furlough scheme as seen in the UK, N26 said it “decided to consolidate the affected functions”.
The fintech told Finance Fwd that the lay-offs mainly concerned recruiting roles.
Mitch Babineaux, a talent acquisition manager and one of the fintech’s first US employees to join in Autumn 2018, was among the nine employees to be fired in the last two weeks.
Babineaux says the dismissal “came as a surprise,” but that N26 “really took care” of those it let go.
“Our severance pay is the best compared to what my friends got in other companies,” says Babineaux. “I’m pretty close to my colleagues and the US leadership team, so I know that our termination was the very last option for them.”
Whilst N26 dismissed nine US employees, fellow European challenger Monzo fired a much larger 165 employees at the beginning of April when it shut its Las Vegas office.
N26 seems to be leading the European advance into the US challenger bank market, holding a 3.55% share of US consumers, according to Apptopia research revealed by Sifted.
This can be compared to peers such as Revolut and Monzo, which hold just 0.97% and 0.23% respectively.
However, local challenger bank Chime still holds 60% of the market, showing just how far these European fintechs still have to go to truly disrupt the region.
N26’s US CEO Nicholas Kopp is set to leave this summer, but his succession is yet to be found. With the loss of key US-based recruiting team members, it would seem the challenger will be recruiting for the role from its Berlin-based headquarters.
Earlier this month, N26 bagged a $100 million investment from existing investors, It said it would use the fresh capital to grow its operations in Europe, the US, and Brazil, calling these “more attractive markets” than the UK, where it shut operations earlier this year.