Affirm Holdings Inc. reported it cut 19% of its workforce on Feb. 8. On Feb. 9, the buy-now-pay-later vendor reported a $322.5 million loss in its fiscal second quarter 2023.
Max Levchin, founder and CEO, told investors the company plans to accelerate growth and encourage repeat consumer usage with a smaller, nimbler workforce, according to a Seeking Alpha transcript.
In a letter to shareholders, Levchin said the company plans to keep its headcount flat for the foreseeable future. Affirm will redirect resources toward research and development efforts, margin-improving projects, repeat customer engagement and Debit+, Affirm’s debit card.
Buy-now-pay-later (BNPL) vendors struggle with inflation
Amid inflation, the Federal Reserve’s rate increases and more government regulations, BNPL vendors like Affirm are working to entice new customers while turning a profit.
The installments payment vendor wants to move away from zero-interest, long-term loans and switch to loans that charge interest. Currently, Amazon-related Affirm loans account for more than 20% of Affirm’s gross merchandise volume in the last three months of 2022.
Affirm usage among Top 1000 retailers grows 11% in 2021
14.4% of retailers in the 2022 Digital Commerce 360 Top 1000 database offer Affirm at checkout, including Amazon Inc., Walmart Inc., Target Corp., Wayfair Inc., Williams-Sonoma Inc. and others. That’s up 11% in 2021 compared with 2020. The Top 1000 ranks North American web merchants by web sales.
Affirm duplicate charges
In January, some Affirm customers were incorrectly charged multiple times between Jan. 12-13. Some consumers took to Twitter to voice concerns. Twitter user Chelsea Thayer told Digital Commerce 360 that Affirm charged her multiple times on Jan. 12 for a total of nearly $800.
“The money was not released back to my account until Jan. 17,” resulting in a negative balance, she said. “The main issue was not being able to get groceries for the week for my family.”
Affirm said it “worked quickly to resolve the technical issue.” It resolved the issue some time on Jan. 12, according to the company. Affirm did not share what percentage of affected customers.
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