California-based fintech Aspiration plans to let go of 180 employees in a company-wide restructuring.
The reduction in force will affect both remote staff and employees based out of Aspiration’s Marina Del Rey, California, headquarters. Aspiration’s last layoff was in December, when the company cut about 100 employees. The company declined Forbes’ request for comment.
“The layoff is necessitated by the need to streamline and restructure the business in light of current economic conditions and the limited capital available to the Company,” a Worker Adjustment and Retraining Notification letter filed by the company and signed by CEO Olivia Albrecht reads. “The Company is saddened to have to take this step.” The letter states the layoffs will begin on May 26th and lists specific positions to be cut. (The federal WARN Act generally requires workers get 60 days’ notice in advance of major plant closings and layoffs. California has its own separate WARN law.)
Aspiration launched in 2013 as an environmentally-conscious digital bank allowing customers to round their purchases up to the nearest dollar for donation to tree-planting non-profit organizations. Notably, the layoff will include Aspiration’s chief administrative officer, Deepak Kumar, who oversaw the company’s consumer-facing banking operations including risk management and customer service call centers according to his LinkedIn profile.
The neobank business model has proven more difficult than it seemed at the height of the pandemic, when digital services soared in popularity. Over time, many digital banks found that the cost to acquire new customers was too high relative to the revenue they could generate from them.
In late 2021, Aspiration began to shift away from digital banking and towards selling carbon credits to businesses. The carbon offsets market is based on the idea that businesses can mitigate their carbon footprint by funding projects that remove carbon from the atmosphere.
The layoff spans across departments including product management, software engineering, customer engagement and more. Another executive impacted by the layoff is Aspiration’s chief of staff. News of the layoffs was first reported by the St. Louis Business Journal.
In 2021, Aspiration announced plans to go public via special purpose acquisition company (SPAC) Interprivate III Financial Partners Inc. The IPO deal deadline has been delayed three times, first to December 31, 2022, then to March 31, 2023 and most recently to May 1, 2023. It is currently the second-longest outstanding SPAC deal on the market, according to Julian Klymochko, CEO of asset management firm Accelerate, which invests in SPACs.
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