Startups lay off 7% of staff as loan demand weakens

Lending giant Upstart has laid off about 140 employees, or 7% of its total workforce, sources told TechCrunch.

The cloud-based AI lending platform notified affected employees of the layoffs on Tuesday. The company says Upstart has about 2,000 employees and has confirmed layoffs.

“Given the difficult economic conditions, we are making this difficult decision for the long-term health of the company. We are continuing to hire for the role,” Upstart spokesperson Mike Nelson said in a statement.

The startup says in its latest article: 8K filing The U.S. Securities and Exchange Commission said the decision was due to ongoing economic challenges and a “declining volume of loans” on its platform. However, the company has not confirmed the exact reduction in loan amount.

at the end of it Quarterly results The California-based company reported in August that the volume of loans on its platform had grown 72% annually, from 456,610 in the first half of 2021 to a total of 786,675 over the same period a year later. Third quarter earnings he will be released on November 8th.

Startups are facing difficulties as demand for loans in the United States weakens as a result of a significant interest rate hike by the US Federal Reserve to combat rising global inflation. The company’s stock has fallen 84% this year. Upstart found him trading at $22.88 in Tuesday afternoon trading.

Upstart’s market cap climbed to nearly $32 billion at some point after the acquisition. public debut Since then, the company’s total share price has plunged to less than $2 billion early Tuesday.

Adverse economic conditions are not only affecting the lending industry, but also many technology companies around the world.Telemedicine unicorn cerebrumonline real estate market Jiro and SurveyMonkey parent Momentive Global has laid off all its employees in recent weeks.companies including netflix, Spotify When Tencent made a similar decision.Indian startups such as Bijuno When Ora It also laid off employees amid a slump in funding and investments.

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