Digital payments firm Stripe to lay off 14% of workforce

(Representative Image)

Stripe Inc, the digital payments giant which was valued at $95 billion in its last funding round, is cutting its headcount by about 14% as startups trying to navigate a tough investment market rush to rein in costs.

After the job cuts, Stripe will have about 7,000 employees, according to an email to employees from founders Patrick and John Collison on Thursday.

U.S. technology stocks have been crushed this year as tightening monetary policy and worries of a looming recession soured investor sentiment.

That has also spilled over into the venture capital market, where jittery investors concerned about overpaying have avoided signing big checks for startups.

The pain has been more acute for companies seeking late-stage funding as it becomes tougher to justify higher valuations.

The layoffs come months after Stripe cut its internal valuation by 28%, according to a report.

"We were much too optimistic about the internet economy's near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown," Stripe's founders said in the email, adding that they had overhired and grew operating costs too quickly.