Israeli fintech company Riskified (NYSE: RSKD), which has developed a platform to prevent ecommerce fraud, is laying off 6% of its workforce - about 40 employees out of 750. The company, which held its Wall Street IPO in 2021, at a company valuation of $3.3 billion. After the share price initially rose, it fell back sharply when most tech companies lost a substantial amount of their value and today it is traded on the NYSE with a market cap of $860 million.
Challenging macroeconomic environment has led to low growth
Riskified founder and CEO Eido Gal sent a letter to employees about the current situation at the company. He wrote, "Since we became a publicly traded company more than two years ago, we have coped with a challenging macroeconomic environment and as a result our rate of growth has been lower than our historical rate and that is not the place we want to be in the longer term. We have worked strenuously for a while in order to adjust expenditure to our revenue and strengthen and maximize the business, while continuing with innovation. I am proud of our ability to continue to grow revenue while reducing spending but this still requires a faster process to reach our long term EBITDA targets. Consequently, the next logical step is reducing the number of employees."
Gal added although the cuts are extensive, they will not affect all activities to the same extent. For example, human resources and recruitment will be affected more than operations. "We are also reducing some management layers and combining some teams in order to be more efficient," Gal wrote.
He wrote that the decision to say goodbye to talented people has not been easy, but he has no doubt that those leaving will continue to excel in their careers. "I am grateful for your contribution over the years. I understand that the process is difficult and disruptive - I apologize for that," Gal wrote.
Published by Globes, Israel business news - en.globes.co.il - on February 13, 2024.
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