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Buzzy app-only bank Monzo is cutting 120 jobs as a result of the COVID-19 pandemic.
Reuters reported on Wednesday evening that staff were told of job cuts in a memo. A spokesperson for Monzo confirmed the redundancy plans but declined to comment further.
The lay offs affect around 8% of London-headquartered Monzo’s staff.
A source close to the company said management had “exhausted every option” to avoid job losses. Around 300 staff have already been furloughed under the government’s job retention scheme and executives have waived some or all of their pay in response to the pandemic.
The redundancies were described as “genuinely heartbreaking” in the memo to staff, according to Reuters.
The cut backs come amid a slump in economic activity across Britain caused by the coronavirus pandemic.
Monzo makes money through people spending on its “hot coral” cards and lending to customers. Consumer spending has dived as shops across the UK have closed and a severe recession looms. People have also cut borrowing, with figures this week showing consumers were instead focused on paying off debt.
Founded in 2015, app-only bank Monzo has more than 4 million customers in the UK. It was valued at over £2bn (£1.5bn) last year. The company is said to be currently in talks to raise up to £80m but faces a 40% drop in its valuation as a result of the pandemic.
Last month founder Tom Blomfield stepped down as founder to take up a new role as president. TS Anil, who ran Monzo’s US operations, has moved to oversee the whole bank. Anil is a veteran of Standard Chartered, Citi, and Visa.
Read more: RBS abandons Monzo-challenger Bó
Monzo is not the first British fintech business to announce job cuts as a result of the COVID-19 pandemic. Rival Revolut last month cut 60 jobs in response to the crisis. RBS (RBS.L) also abandoned plans to build its own rival to both Monzo and Revolut.