Canada’s Wealthsimple becomes the latest fintech to cut staff

The digital wealth manager cuts 12.6% of its workforce, joining Klarna, Curve and Freetrade in recent staff layoffs.

Image source: Michael Katchen/Wealthsimple.

Toronto-based Wealthsimple has had to lay off 159 members of staff this week because of “changes to market conditions”.

The digital wealth manager’s co-founder and CEO Michael Katchen shared the news in a company-wide letter to employees following an all-hands meeting.

“If you’ve been with us over the past two years, you know it’s been a time of immense volatility,” Katchen wrote.

“Just about anyone who made predictions about how the pandemic would affect the economy was wrong about one thing or another.”

“Of course, volatility works both ways, and we’re seeing the other side of it now as the pandemic market conditions unwind,” he added.

In the Medium post, Katchen outlined what the shift means for the team, how it’s planning to take care of its former employees and what happens next.

Sharing the message on LinkedIn, he urged anyone hiring to reach out to a Wealthsimple alumni email to be connected to “remarkable talent” and posted a spreadsheet with details of those laid off.

The digital wealth manager exited the UK in December 2021 after four years to focus on its home market in Canada.

Now, along with the layoffs, comes another shift for the business which will be “laser focused” on its core businesses going forward, Katchen said.

He indicated a shift to investing, banking and products that will “power financial innovation”, such as crypto.

Katchen also suggested a reduction in investments in other areas like peer-to-peer payments, tax and merchant services, with restructuring in recruiting, marketing, research and client success.

To support its leavers, the company has built a package of benefits, including “generous severance”, extended health coverage, the option to keep work equipment and guaranteed interviews for anyone interested in working with IGM or CanadaLife, two of its investors, to support them in the job search.

The Wealthsimple layoffs follow a current trend in fintech as markets remain volatile.

‘Buy now, pay later’ Klarna laid off 10 per cent of its staff last month, with banking app Curve, and challenger stockbroker Freetrader following suit earlier this month.