Revolut is in the middle of a major cost-cutting review code-named Project Prism and has revoked job offers to graduates with just days of warning as the payments group tries to shield itself from the economic downturn threatening fintechs.
The $33 billion (€33 billion) company began the business review in May as fintechs prepared to withstand worsening economic conditions and rising interest rates, according to two people familiar with the matter.
Project Prism involves a “full, in-depth analysis of roles and responsibilities, teams [and] seeing what consolidation they could do on the ground”, one of the people said.
Revolut declined to comment on Prism, but a person familiar with the company’s position told the Financial Times it was “conscious of the economic concerns and the downturn in fintech and ... like any responsible company, we’re looking at hiring, and our cost base and resources, and whether those are appropriate, and planning pragmatically for the future”.
A handful of graduates wrote on LinkedIn in recent days to say that Revolut had pulled their job offers, in some cases just days before they were due to begin work, because of a “review of business needs”.
At least one graduate received a company laptop after they had been informed their offer had been revoked. One person familiar with the situation said they would have to return the laptops.
“They say they want to make sure I’m going to be financially secure, which is kind of a joke — one month’s salary is better than nothing, but it’s a joke compared to the rent contract I’ve signed for two years,” said one of the graduates jettisoned by Revolut. “This put me into a s**tty situation.”
Revolut said it had “regrettably” rescinded the offers to four candidates “due to changing business needs in one specific team”.
“We have apologised to the candidates and offered to support them on the next step of their career journey (such as interview prep and recruitment advice) as well as offering financial support,” the group said, noting that it continues to actively hire, with more than 200 open positions, and is adding 300 net jobs every month.
In July, its global headcount topped 5,000 for the first time. The fintech has about 1.7 million banking customers in the Republic.
[ Revolut to use ECB banking licence to offer personal loans to Irish customersOpens in new window ]
Fintechs have had to make swingeing cuts as macroeconomic conditions have soured, consumer spending has fallen and investors have proven far less willing to bankroll growth without profits.
Buy now, pay later pioneer Klarna, which had its valuation slashed from $46 billion to $7 billion in a recent funding round, said in May it would reduce its workforce by 10 per cent as it refocused on “short-term profitability”.
Earlier this week, the Financial Times reported that Revolut was facing pressure from its auditors to improve internal controls after UK regulators highlighted significant flaws in the auditing of its accounts, including an “unacceptably high” risk of “material misstatement”.
The UK company, which became Europe’s second most valuable private fintech last year when it secured a price tag of $33 billion in an $800 million funding round led by SoftBank and Tiger Global, is still awaiting its banking licence in the UK. In February, it said it was dropping plans to use an e-money licence it secured from the Central Bank of Ireland last year. It was awarded a full banking licence by the European Central Bank in December last and said it intended to use that to offer services to Irish customers instead.
Revolut has suffered an exodus of senior staff in recent months including its UK money laundering reporting officer, UK chief risk officer, UK data protection officer and both UK and global heads of regulatory compliance. — Copyright The Financial Times Limited 2022
