Buy-now-pay-later lending firm, Affirm Holdings Inc. (NASDAQ: AFRM) plunges around 20% in pre session on Thursday as the company announces a restructuring plan that will result in the layoff of approximately 500 employees, or approximately 19% of its workforce, sending the company’s shares down approximately 18% in aftermarket trade.
“We hired ahead of the revenue required to support the size of the team,” Affirm’s Chief Executive Max Levchin wrote in a letter to shareholders.
As Americans turned to online shopping during the pandemic, BNPL services, which allow consumers to split purchase payments into installments, grew in popularity.
The sector has recently been under pressure as a result of rising funding costs and lower consumer spending during a period of high inflation.
Affirm’s move follows that of several other U.S. companies, including Goldman Sachs Group Inc. and Alphabet Inc., which are laying off thousands of employees this year due to rising costs and the threat of a recession.
The company, which was founded in 2012, also announced the discontinuation of several initiatives, including Affirm Crypto. Affirm, based in San Francisco, California, anticipates total restructuring costs of $35 million to $39 million.
Affirm Holdings announced on Wednesday that it will lay off 500 employees, or 19% of its workforce. It is the latest company to lay off workers as corporate restructuring continues. After consumer spending slowed and interest rates rose over the last three quarters, the buy now, pay later company said it had built a larger team than it could support and that it needed to cut operating expenses.
New Relic, Inc. (NYSE: NEWR) Releases Q3 Fiscal Year 2023 Results
The all-in-one observability platform for every engineer, New Relic, Inc. (NYSE: NEWR) rose more than 2% in pre session on Wednesday as the firm releases financial results for the third quarter of fiscal year 2023.
New Relic CEO Bill Staples stated that they delivered the quarter with a relentless focus on their customers, product innovation, and operations, exceeding our revenue and profitability targets. With their all-in-one observability platform and consumption business model, they are well positioned for continued growth. They are rapidly attracting new customers and expanding their existing customer base as they expand their observability practices and continue with their digital transformation and cloud adoption. Profitability is becoming strength for New Relic as we intensify their focus on profitable growth.
In collaboration with Microsoft, New Relic launched the Azure Native service, which allows all Azure customers to install supported New Relic agents natively from within Azure. Customers can now discover, onboard, and pay for New Relic through the Azure marketplace, while also depleting Azure consumption commitments. They can also choose to store their New Relic telemetry data in Azure.