Corporate spend management startup Brex has laid off 136 people, or 11% of its staff, across all departments.
As per reported by TechCrunch, the layoffs are part of the Brex's restructuring as it leans into the enterprise segment after a tumultous 2022. The company announced in June that it would no longer serve SMBs (Small to Medium Business) - which caused a small uproar in the startup community.
Post the layoff, Brex would have just over 1,150 employees, an evidence that even decacorns may not be immune to fundraising and cutthroat environment of funding winter. In early 2022, Brex had secured $300 Mn in Series D-2 round financed by Greenoaks Capital and TCV at a valuation of $12.3 million.
Co-founder and co-CEO Pedro Franceschi wrote in a blog that Brex has decided to "sharpen our focus and serve fewer customers really well".
Franceschi also mentioned that the new "macro environment" post the restructuring will quite different from the first five years of the company and expects the remaining employees to remember that it "warrants a new level of focus and financial discipline."
In an attempt to soften the blow for the laid-off workers, Brex has said that the affected employees will receive eight weeks of pay, with an additional two weeks for each complete year of service. For those with less than one year at the company, the startup said it is waiving the equity cliff. And for those with options, it is offering to extend the exercise period to seven years, Tech Crunch reported.
The company also said that the impacted workers will have access to current healthcare benefits through the end of the month, and Brex will pay for six months of health insurance. The company also mentioned that it is also dedicating part of its recruiting team to help those impacted “find new opportunities,” and will prioritize hiring them back “as roles open up over time.”
On the leadership, the San-francisco based startup has faced setbacks with their Chief revenue Officer Sam Blond leaving to join Founders Fund as an investor. He would be replaced by SAP/Concur veteran Doug Adamic, who would driving enterprise growth in his role.
Multiple sources have also reported that Adam Swiecicki is stepping down from his role as Chief Financial Officer at Brex, a position he assumed late last year when Michael Tannenbaum took on the position of Chief Operating Officer. He will be joining workforce platform Rippling, which recently entered the spend management space, as the new CFO.
Tannenbaum — who began serving as CFO initially in 2017 — will serve in both positions.
The light may not shine much bright for the speding management firm but there have a good news. TechCrunch reports that the cash deposits were up 100% year over year, the company noting that rising interest rates have actually increased the revenue in its deposits business. It seems there would a light at the end of the tunnel.