The layoff was announced due to difficult macroeconomic conditions. Credit: Mediamodifier from Pixabay.

Upstart, a consumer credit platform powered by artificial intelligence (AI), has announced plans to cut its workforce by 20% citing difficult macroeconomic conditions. 

The layoff, which is part of the fintech’s reorganisation plan, will result in 365 redundancies.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

In a filing, the US-based company said: “On 31 January 2023, in response to the challenging macro environment where many lenders and credit investors have significantly reduced or paused loan originations, Upstart Holdings (Upstart) implemented a plan of reorganisation (the “January 2023 Plan”).

“The January 2023 Plan is designed to reduce operating costs, streamline operations and return Upstart to profitability. The January 2023 Plan involves a reduction of Upstart’s current workforce by approximately 20% or approximately 365 employees.”

Over the next 12 months, Upstart hopes to save $57m in operating expenses, principally associated with employee cash compensation and benefits.

Additionally, through 2025, the plan is expected to result in $42m in non-cash savings via stock-based remuneration for Upstart. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Until the macroeconomic environment improves, Upstart also intends to put the development of its small business lending product on hold.

The latest job cuts come three months after the AI-powered lender fired 140 hourly employees, who were engaged in processing loan applications, due to the challenging economy and reduction in loan volumes on its platform.

Earlier this week, BM Technologies said it will trim its workforce by one-fourth to reduce operating costs and improve cash flow.