Max Levchin, the CEO of Affirm, a buy now pay later company, has confirmed that he will be shutting down his “Affirm Crypto Program” amid reduced consumer spending and a changing macroeconomic environment.
The CEO released a letter to shareholders on February 8 along with a 19% headcount cut. He cited uncertain macroeconomic conditions and the need to offset some liabilities on the company’s balance sheet as the two main reasons behind the decision:
“In a period of heightened economic uncertainty, we are doubling down on our core businesses, delaying projects with less certain revenue schedules, and aligning our operating expenses with revenue. Simultaneously with the reduction of our workforce, we are canceling several initiatives, such as Affirm Crypto.
The firm’s chief financial officer, Michael Linford, said the decision was made to meet profitability targets.
“We have taken decisive action to reduce expenses. We believe our cost base is now the right size to meet our profitability targets while also supporting our product roadmap and long-term growth ambitions,” he said.
Affirm is a payment service provider for millennials similar to Afterpay that allows customers to buy a product online and pay later.
The company launched the “Affirm Crypto Program” in late 2021 near the peak of the crypto market when it partnered with Bitcoin payment platform NYDIG to process Bitcoin (BTC) transactions and provide a crypto account for Affirm users.
The program allowed users to set up a scheme in which the monthly interest accrued from a user’s savings account would be automatically converted into BTC.
However, Affirm noted that its cryptocurrency program will officially shut down on March 31. according to the Affirm website:
“On March 2, 2023, the ability to buy bitcoin through the Affirm app will end. We will discontinue the Affirm Cryptocurrency program on March 31, 2023.
“Any bitcoin in your account when the program ends will be sold at the CME CF Bitcoin Reference Rate (BRR) from 4:00pm London time with the proceeds of the sale deposited into your Affirm account. Savings”, added the note.
The shutdown is, of course, part of a larger staff cleanup for the San Francisco-based lending platform. Levchin said the 19% reduction in his workforce went into effect today.
On a February 8 note employees, Levchin took the blame, claiming he was too slow to act on the actions of the US Federal Reserve:
“Everything changed in mid-2022. Over the past three quarters, the Fed has raised its benchmark rate at an unprecedented pace. This has already reduced consumer spending and dramatically increased the cost of borrowing from Affirm. The root cause of where we are today is that I moved too slowly as these macroeconomic changes unfolded.”
Approximately 2,593 people claim to be employed at Affirm, according to current numbers from LinkedIn.
This means that around 500 people were likely affected by today’s announcement.
Related: Coinbase to cut another 20% of its workforce in second wave of layoffs
Cointelegraph reached out to Affirm to find out how many employees related to its crypto initiative were affected, however no additional information was shared.
However, the CEO indicated in the letter that he expects to keep the current workforce essentially unchanged for the foreseeable future.
Affirm’s stock price, dubbed AFRM, has fallen 19.1% in after-hours trading on the NASDAQ, according to Google Finance.
