Fintech giant Brex, valued at $12.3 billion, is laying off 20% of its staff, Fortune has learned.
According to an employee at the company, an internal meeting was announced at 11:30 a.m. EST and held an hour later, when the cuts were announced.
“We knew about this for about a week in advance through rumors. Engineering managers knew about this before others,” the source told Fortune.
Cosmin Nicolaescu, the CTO of Brex, will be leaving his position and transitioning to an advisor role. Nicolaescu has worked at Brex for just over five years. A spokesperson for Brex linked the firm’s latest blog post when asked for comment.
The startup, which manages finances for corporate customers, last laid off 136 people, or 11% of its staff, in October 2022, TechCrunch first reported, and Brex’s CFO at the time departed to join software startup Rippling. Before that, in June 2020, Brex laid off 62 employees, or about 17% of its staff.
“It’s similar to last October layoffs. They announce like 1/2 hr before that there is a meeting in 1/2 hr and then they do layoffs. They send out emails at the beginning of the meeting indicating if you’re laid off or not,” the current staffer added. “Slack accounts aren’t immediately deactivated yet, which is different from last time.”
Affected employees will receive eight weeks of severance, plus an additional two weeks of pay for every additional year of service, the company said.
The layoffs come after a report in The Information on Tuesday revealed Brex incurred an average monthly cash burn of approximately $17 million in the fourth quarter of 2023. The report added that Brex has reduced its cash burn, dropping from an average of $22 million per month in Q4 2022. However, the latest monthly average still amounts to $200 million annually. According to The Information, Brex currently has a cash runway of four years.
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