Cloud banking fintech unicorn cuts 50 staff

UK fintech unicorn Thought Machine has cut 50 staff in roles it said were no longer needed, with sales and marketing positions mainly affected.

The cloud-based core banking software provider, which now employs 590 staff, has grown rapidly and accumulated significant customers from the challenger and traditional bank sectors.

Lloyds Banking Group, JPMorgan Chase, SEB, Standard Chartered and BBVA are customers, as are challenger bank Atom and fintechs TransferGo and Curve.

The London-headquartered company was launched in 2014 by ex-Google executives, including the internet giant’s former head of text-to-speech, Paul Taylor. It became a unicorn – worth more than $1bn – in 2001. It has now built a value of over £2bn by selling its cloud-native core banking system known as Vault.

A Thought Machine spokesperson told Computer Weekly: “We had around 50 people affected out of 640. The majority of the cuts were in sales and marketing, with a few reductions in back-office roles and other roles we no longer needed.”

The fintech sector, known for its rapid growth and hiring, has seen companies trim back their numbers this year amid the global economic downturn.

A report from Finch Capital found that investment in fintech across Europe fell by 70% in the first six months of 2023, with “more pain” expected for the sector as investors take a more disciplined approach. But it predicted a more mature and sustainable future lay ahead.

Finch Capital reported that the European fintech market’s total investment – including major centres such as the UK, France and Germany – was €4.6bn in the first six months of 2023, compared with €15.3bn in the same period last year.

Fintechs have been trimming their staff numbers in response to the slowdown.

In June, GoCardless said it was reducing its global workforce by around 15% and moving some roles from the UK to a lower-cost region as it cuts back investment in longer-term initiatives. It also closed more than 50 positions that were advertised and reduced its senior leadership team as part of the announcement.

Earlier, peer-to-peer lending fintech LendingClub cut its workforce by 14% in January, as high interest rates stifled demand for its lending services.