Monzo cuts 120 jobs in its UK head office
Monzo has made a second cut to its workforce, announcing the redundancies of 120 staff in the UK as the economic strains of the coronavirus crisis continue to weigh on the fintech.
According to an internal note seen by Reuters on Wednesday, the bank told employees: “Unfortunately we haven’t been able to achieve the goal of preventing the risk of redundancy at this time. It’s genuinely heartbreaking to share the news.”
The redundancies, which account for roughly 8% of the start-up’s workforce, are being made in Monzo’s London-based head office and in the fintech’s operations team.
The memo was written by new CEO TS Anil, yesterday afternoon. Anil also said the one year “cliff” from employees’ vesting schedule will be waived so they do not lose out on any shares, according to TechCrunch.
“The government has been clear that the furlough scheme should not be abused if redundancies are planned anyway. This was based on our understanding of the impact of the crisis,” the source said.
The UK challenger bank shut its Las Vegas office in April which saw 165 employees let go. In the UK, 295 staff members have been furloughed, and co-founder Tom Blomfield is currently taking no pay for the next year whilst the board has volunteered to take a 25% pay cut.
A source told Reuters that staff who had volunteered to be furloughed in March are not linked to these new layoffs, but that there could be some overlap.
The fintech also hit headlines last month, when it was revealed that its valuation had plummeted 40% to £1.25 billion, down from the £2 billion it was fundraising at in June 2019.
Monzo is still in discussions over its latest funding round which is understood to be aiming for between £70 million and £80 million. The bank announced in April that it has applied for a US banking licence as part of its stateside push, which will require capital to succeed.
Fellow UK challenger bank, Revolut, dismissed roughly 60 employees as part of its “cost savings” strategy during coronavirus last month, as reported by Financial News. The fintech cited the “lockdown” as the reason for these cuts.
Also last month, German challenger bank N26 cut 10% of its 90-person New York-based workforce, and in April it put 150 employees on short-time working in Berlin and Barcelona.