Rival fintech firms Revolut and Wise are still recruiting

Not all fintech unicorns are cutting jobs.

After Klarna announced plans to lay off 10% of its workforce on Monday, some fintech rivals made clear they had no intention of cutting jobs or freezing hiring.

Revolut, the $33 billion digital banking startup, said the company is “actively recruiting” with more than 250 open positions listed on its website.

Meanwhile, Wise CEO Christo Karman said the London-based money transfer company is in a “different place” than tech companies that are letting employees go.

“Years of building WISE as a long-term profitable business is now paying off,” Karman wrote on Twitter on Wednesday.

“There is a huge demand for international banking, we can’t hire people fast enough to create it.”

Meanwhile, German digital bank N26 said it had “no current plans to cut staff”. The company was last valued at $9 billion.

“We will continue to make strategic investments to grow our team with a focus on products, technology, compliance and financial crime prevention,” a spokesperson for N26 said.

It stands in stark contrast to Klarna. The buy now, pay later company — which allows shoppers to split their purchases into equal monthly installments — said it plans to scrap an estimated $700 due to the deteriorating economic climate.

“When we laid out our business plans for 2022 last fall, the world was very different from the one we live in today,” Klarna CEO Sebastian Simyatkowski told employees in a pre-recorded video on Monday.

“Since then, we have seen a catastrophic and unnecessary war in Ukraine, a shift in consumer sentiment, a sharp increase in inflation, a highly volatile stock market, and a potential recession.”

Other fintech companies, such as Robinhood and Better.com, have also taken measures to cut jobs and curb costs this year.

Digital finance got a big boost from the Covid pandemic as people turned to online channels to make payments and apply for business loans and stocks. But the sector took a beating in 2022 as the war in Ukraine, rising inflation and high interest rates prompted investors to question the high valuations in the space.

For example, Wise has lost nearly two-thirds of its market value since its July 2021 listing.

Rishi Khosla, chief executive of UK online lender OakNorth, said there have been “huge bubbles” in fintech – from buy now, pay later to cryptocurrency. He said the BNPL has been allowed to thrive in large part thanks to “regulatory arbitrage”.

“Ultimately, regulation will catch up to them, so this opportunity will not last,” he said.

Klarna is reportedly seeking funds at a 34% discount on its latest investment round, which valued the company at $46 billion. A Klarna spokesperson dismissed this as speculation.

Asked if Revolut plans to follow suit, a company spokesperson said it had no intention of doing so.