Varo Cuts 75 Jobs As Digital Bank Restructures
- Digital banking
- 22.07.2022 12:00 pm
Varo Bank has become the latest fintech player to make job cuts, axing 75 positions as it looks to cut costs in the face of worsening economic conditions.
In a message to staff, CEO Colin Walsh says the cuts - which represent about 10% of Varo's workforce - are needed to make sure the firm has sufficient capital to "execute on our strategy and path to profitability".
After the fintech sector saw record investment totals in 2021, the appetite from venture capitalists to bet on fintech firms has cooled considerably this year. Varo joins a list of fintechs to conduct layoffs in recent months that includes Klarna, Bolt and Robinhood.
Varo in September raised a $510 million Series E round at a $2.5 billion valuation.
First-quarter filings with banking regulators showed Varo was burning through its capital quickly and risked running out of money by the end of the year, as first detailed in the Fintech Business Weekly newsletter. Walsh told Banking Dive that "we remain very well capitalized and have sufficient capital to reach profitability, without having to raise additional capital."
The company, founded seven years ago, is establishing a new business unit called Varo Tech, according to Walsh's announcement. The department will "bring together the technology, design, data and product functions under a single umbrella" to increase speed and reduce costs, Walsh said.
The company, through a spokesperson, declined to share further detail on what jobs are being cut through the layoffs.