Nigerian fintech startup, Paystack, is slimming down its team outside Africa, starting with cutting 33 jobs in Europe and the UAE, where it has an engineering hub.
Shola Akinlade, Paystack’s co-founder and CEO has said that: “We’re changing our operating model to prioritize locating team members within the markets we serve, to localise costs and get closer to customers,”
The drop in currency value in Africa, especially in Nigeria, where Paystack operates mainly, has caused challenges for many startups. They get investments in foreign currencies like US dollars but earn most of their revenue in local currency. This makes covering software costs and salaries in dollars a problem.
Earlier, Femi Iromini, CEO of Moni, mentioned that due to the currency float in Nigeria, revenue changed from $1 per ₦500 to $1 per ₦700, a 40% decrease for most startups.
The affected Paystack employees will get a severance package of four months’ salary and a three-month insurance cover. Akinlade said, “These are some of the most talented people I’ve ever worked with, and my goal is to ensure that every single one finds new roles as soon as possible,”
This layoff at Paystack happens a year after its parent company, Stripe, cut 14% of its workforce to reduce costs. Stripe CEO Patrick Collison acknowledged that they let operating costs grow too fast, which allowed operational inefficiencies to creep in.
Remember, in 2020, Stripe acquired Paystack in a $200 million deal, marking the largest acquisition in the Nigerian startup ecosystem.