One of the Hottest Financial Startups Is Cutting Jobs and Foregoing Its CEO’s Pay
Finance startups are thought to have so much potential that Citigroup predicted that fintechs could supplant 1.7 million jobs in the traditional banking sector in the next decade.
But that picture of the future seems a bit more shrouded now. In the past year, results from some of the most well known fintechs has raised concerns that major buyers for their loans—hedge funds and investors—are drying up.
And the latest fintech to feel the pain of a slowdown in the loan pipeline: Prosper Marketplace—a private company that was once growing rapidly, nearly tripling its staff in 2015.
On Tuesday, the Propsper reported that it plans to cut 28% of its staff, shutter its Salt Lake City office, and reshuffle its executives, according to the company, and first reported by the Wall Street Journal. CEO Aaron Vermut is also expected to forgo his salary.
“Over the past year we invested for growth, but with the recent tightening of the capital markets we are refocusing on our core consumer loans business,” Vermut said in a statement to Fortune.
Prosper is expected to cut 170 jobs in human resources, marketing, business development and more. The company’s chief risk officer, Josh Tonderys, and top business-development, Itzik Cohen, will also be leaving.
It’s a complete shift from the tone in Prosper’s office last year, when prosper was expected to file an IPO. That plan has since been shelved. It was valued at about $1.9 billion April last year.