PagBank PagSeguro

PagSeguro and will bank part of layoff wave in LatAm

The new wave of mass layoffs by tech companies has infected fintechs in LatAm.

Brazilian companies PagSeguro and will bank — two of the most critical players in the sector in the South American country — announced significant cuts to their teams.

In a statement, PagSeguro said it is implementing a 7% reduction of its staff. The company says that “just like technology companies and fintechs in Brazil and worldwide,” they also needed “some adjustments in their structure.”

“After years of continuous growth of our team, we are implementing a reduction of about 7% of the total number of professionals, from several areas, to improve the company’s efficiency,” the company says.

“PagBank PagSeguro remains committed to its mission of democratizing access to financial services and payment solutions in Brazil, offering a simple, secure, accessible, and digital ecosystem to merchants and consumers.”

A complicated period for fintechs

In the past 12 months, PagSeguro’s shares have fallen 55% on the São Paulo Stock Exchange, and they are currently trading at 30% of their IPO price.

For many shareholders of this fintech, one factor that has most affected the company in recent months has been the Brazilian Central Bank’s new policy of setting caps on interchange fees for prepaid and credit cards, which occurred late last year.

Experts believe that this new policy has the potential to reduce PagSeguro’s revenue by 3%, while its pre-tax profit could fall by 15% in the coming months.

Will bank said in a statement that it is a “constantly evolving” company that moves in its structures “are part of the nature of its business.”

will bank

The digital bank adds that it “continues with the number of 1,400 employees, spread in various parts of Brazil and the world.

According to employee reports, will bank has been cutting costs since last year, affecting different areas of the company.

Brazil’s biggest players are losing market value

In December, Nubank and XP also fired a large number of employees. The companies have not revealed the numbers of employees affected, but reports of former employees on social networks indicate that the numbers are in the hundreds.

In Brazil, the last few years have been fantastic for fintechs, which have seen an unprecedented boom along with a considerable expansion of services. But the complex scenario of rising interest rates and economic uncertainty is hitting these companies hard.

Last year, according to an analysis by Valor Econômico, the financial institutions Nubank, XP, PagSeguro, Stone, Inter, Pan, and Méliuz together lost $42.6 billion in market value.

Related:

The changes that are taking place within these companies highlight how an increasing number of fintechs and technology companies are facing a severe global crisis and having to reduce their workforce to cope with the adverse macroeconomic scenario.

A few weeks ago, for example, startup Pier laid off approximately 39% of its staff.

The fintech for college students Partyou, in turn, also recently cut about 30 people from its staff, about a year after announcing a $3 million round led by inovaBra Ventures — a fund of the Brazilian bank Bradesco.

  • Jorge C. Carrasco

    Jorge C. Carrasco is a Contributing Reporter at Fintech Nexus. He reports on fintech, economy, banking, startups, and technology, covering the most impactful stories from a Latin American perspective.

    He has contributed to several international publications, such as Foreign Policy, The Spectator Australia, Estadão, Época, Washington Examiner, and Quillette. Originally from Havana, Cuba, he is now based in Brazil.