Dive Brief:

• Buy now, pay later provider Affirm cut about 140 jobs last week, as installment lending companies pursue operational efficiency in their quest to post profits.
• The cuts, which affected about 6% of the company’s workforce, were the result of consolidation of several operations teams, an Affirm spokesperson said. “We are working individually with impacted Affirmers to assist them with their transition,” the spokesperson said Wednesday.
• About 60 workers in Pennsylvania were affected by the cuts. Affirm employees were notified Feb. 13 and most of those being cut were let go Feb. 15, according to the Feb. 13 Worker Adjustment and Retraining Notification Affirm sent to the Pennsylvania Department of Labor and Industry. 

Dive Insight:

Affirm allows remote work, but has offices in Chicago, New York, Pittsburgh and Toronto, in addition to its San Francisco headquarters. As of June 30, 2023, Affirm had about 2,171 employees, mainly in the U.S., according to its most recent annual filing with the Securities and Exchange Commission.

Some details for the workers in Pennsylvania were provided. “A small portion of the affected employees will have a separation date on or before April 30, 2024,” Barb Cadigan, Affirm’s chief people officer, wrote to the Pennsylvania state agency in the letter.

The dates laid out in the letter applied to the broader group of employees Affirm let go, the spokesperson said. Last February, Affirm shed about 500 employees, or about 19% of its workforce at that time.

For its most recent fiscal quarter ended Dec. 31, Affirm’s loss narrowed, to $166.9 million, and its revenue jumped 48%, to $591 million, compared to the year-earlier period. The company’s forecast for the rest of the fiscal year was conservative, analysts said, despite revenue and merchandise volume jumping over the prior year during the holiday season.

Affirm, led by CEO and founder Max Levchin, is among a handful of payments companies that have made cuts this year, including digital payments companies PayPal and Block and expense management fintech Brex. Late last year, Affirm’s BNPL rival Klarna cut 500 jobs and outsourced them.

As they mature, BNPL companies face growing pressure to generate profits. In a November report, Moody’s Investors Service painted a grim picture for installment lending companies, identifying competition, regulation, economic uncertainty and persistent losses as constraints on the sector.