Melio lays off 40 employees in Israel

Matan Bar credit: Dana Tamari
Matan Bar credit: Dana Tamari

This is the fintech company's second round of layoffs since 2022 when 10% of 600 employees were dismissed.

Israeli unicorn Melio is laying off 7% of its workforce, "Due to organizational changes that include flattening out management layers and internal streamlining processes." At least 40 employees in Israel were summoned today to hearings and several more in the US office. Melio said that the employees affected by the move will receive enlarged compensation packages, subsidies, professional support in finding new work and improved terms for purchasing options.

This is Melio's second round of layoffs since 2022 when 10% of 600 employees were dismissed. The company currently has 650 employees including 400 in Israel. The company says that this is the first round of layoffs that has hit Melio's employees in Israel.

Unlike most companies that have implemented a layoff process in recent years, Melio has explained the move in detail. The company says, "The rate of growth in the company has caused organizational structural awkwardness in some departments and the creation of inefficient management layers. In the last three years, the Israel office has grown from about 90 employees to over 400, of which the development department alone grew from about 50 employees to about 300."

Melio CEO Matan Bar said, "This is a tough day for all of us. Accelerated growth as we have experienced it in recent years is welcome but responsible management must consistently consider anew whether the organizational structure that has worked so far will also serve our aims well in the future. In our case, we are forced to take a difficult decision that is required by reality and unfortunately as a result of the organizational change to part from employees. At the same time, there are no changes in our targets for 2024 and we are convinced that this year, as in every year, we will meet our ambitious targets."

Bar added, "We have plans for speeded up growth in the coming years, even faster than the growth we have experienced so far but we won't be able to fulfil this if we don't behave responsibly in terms of efficiency and organizational focus. Time and again we are included in listings of the most promising companies in the global fintech market and our responsibility is to realize this promise."

$4 billion valuation

Since it was founded the company has raised over $500 million and its most recent valuation in 2021 was $4 billion. Over the past two years, Melio has announced partnerships with leading financial institutions in the US like J P Morgan and Capital One as well as with ecommerce giant Shopify.

Melio belongs to a cluster of Israeli fintech companies that help small and medium-sized organizations with their payment processes. Melio was founded in 2018 and quickly became a unicorn during the Covid tech bubble by providing a payment platform for businesses with individual employees, such as law firms. Melio does more than just transferring money - it synchronizes the payment in business systems and allows companies to compress and spread payments with suppliers guaranteed to receive payments on time.

The most prominent player in the market is (NYSE: BILL), which is a publicly traded company with a market cap of $7 billion, although in 2022 it was traded with a market cap of $12 billion. In the past Bar told "Globes," that "At the emphasis is on creating automation that saves time in transferring payments, while the main value provided by Melio is to assist businesses in protecting their cash flow."

Published by Globes, Israel business news - - on March 4, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Matan Bar credit: Dana Tamari
Matan Bar credit: Dana Tamari
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