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The company will cut 19% of its workforce.Stocks plummet due to poor performance

Home screen of Affirm Holdings Inc. website. Placement photo taken in Little Falls, New Jersey.

Gabby Jones | Bloomberg | Bloomberg | Getty Images

agree with announced that it will cut 19% of its workforce, as reported. second quarter earnings It underperformed analyst estimates on both earnings and earnings.

Stocks fell more than 17% after hours.

In a letter to shareholders on Wednesday, founder and CEO Max Lefchin said it was the “most difficult decision” of all the job cuts the company has taken, saying the layoffs would not take place that day. said it would take effect within

Affirm says it will have 2,552 employees in June 2022, meaning the layoffs will affect about 485 people.

In a message sent to employees early Wednesday, Levchin later shared publicly, saying in the early stages of the pandemic, the company was “consciously prioritizing the revenue needed to support the size of the team. We hired it,” he said, adding that the revenue growth was justified. strategy.

“All that changed in mid-2022,” Levchin said, adding that Federal Reserve policy “repressed consumer spending and dramatically increased Affirm’s borrowing costs.”

“The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded,” Levchin wrote.

The company reported a loss of $1.10 per share in the second quarter of fiscal 2023, according to Refinitiv, while analysts had expected a loss of 98 cents per share. Earnings for the quarter were $400 million, compared to $416 million at 2018, which was below earnings expectations.

Levchin told shareholders that Affirm expects headcount to remain “essentially flat for the foreseeable future.”

“In Q2 2023, we have redirected the majority of our R&D efforts to margin improvement projects, recurring consumer engagements and Debit+. We plan to continue executing on this focused roadmap for several quarters. ,” Levchin said.

Levchin told employees that laid-off workers in the United States will be offered a minimum of 15 weeks of base salary plus one week of tenure per year as severance pay. The laid-off U.S. worker will also receive her $5,000 health subsidy, which covers employee health care for six months, regardless of enrollment status. Employees outside the United States can receive retirement and medical benefits “in line with local practice,” Levchin said.

Workers dependent on employer-sponsored visas will continue to be employed by Afam until April 30 and will have access to one-on-one counseling with Afam’s immigration lawyers, Lechchin said.

Levchin also said laid-off workers can keep Affirm-issued devices to help them find jobs and have access to three months of career advice and an alumni directory.

This is breaking news. Please check the latest information.

https://www.cnbc.com/2023/02/08/affirm-cuts-19percent-of-workforce-shares-tank-on-earnings-miss.html The company will cut 19% of its workforce.Stocks plummet due to poor performance

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