San Francisco-based fintech startup Synapse is reportedly laying off 50% of its full-time workforce. According to a Forbes article citing an estranged employee, the company terminated 68 employees from its 130 strong workforce over a Zoom call.
Founded by Sankaet Pathak, the company makes digital banking software for other fintechs, letting them quickly launch features like mobile checking and savings accounts.
The development was first reported by Business Insider. In an email, company CEO Sankaet Pathak said that the layoffs are around 30% of the workforce. However, Forbes estimates that to be because Pathak is counting the company’s temporary contract workers among those who weren’t let go.
As per the letter sent to estranged employees, Pathak said, “Because of the effects on business of emergency efforts being imposed to slow down the COVID-19 outbreak, Synapse Financial Technologies, Inc. (Synapse) must lay off employees working at our San Francisco facility.” The note said 11 departments were affected, including “Account Management, Engineering, Machine Learning, Customer Success, Sales, Compliance, Facilities, Design, Operations, Finance, and Recruiting.”
The layoffs are not just the only problem in the company’s backyard. Media reports have mentioned that even before the pandemic, the company had been facing multiple issues. The company was sued by three former employees in 2019 for gender and age discrimination. There were also rumours in past months that customers and employees were fleeing away from the startup due to Pathak’s mismanagement and poor judgements.
The company is also having trouble in raising new capital. It had last raised $33mn in Series B round led by Andreessen Horowitz, a year ago.
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