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Payments provider Affirm to sunset crypto program after 19% staff cut

Users will be unable to purchase Bitcoin after March 2, and the “Affirm Crypto Program” will formally close on March 31.

Affirm’s CEO, Max Levchin, has stated that the company’s “Affirm Crypto Program” would be discontinued due to dwindling customer spending and a changing financial situation.

On February 8, the CEO issued a letter to shareholders, coupled with a 19% employee reduction. He stated two key reasons for the decision: unpredictable macroeconomic conditions and the necessity to offset some liabilities on the firm’s balance sheet:

“In a moment of increasing economic uncertainty, we are focusing focused on our core businesses, deferring projects with less assured revenue schedules, and aligning our operating expenditures with revenue. In addition to decreasing our employees, we are winding down many initiatives, including Affirm Crypto.”

According to the firm’s chief financial officer, Michael Linford, the decision was taken to satisfy profitability targets.

“We’ve made substantial steps to cut costs. “We think our cost base is now suitably calibrated to fulfill our profitability targets while also supporting our product roadmap and long-term growth objectives,” he added.

Affirm, like Afterpay, is a millennial-focused payments service company that allows clients to buy a product online and pay later.

The company established the “Affirm Crypto Program” in late 2021, around the pinnacle of the crypto market, when it teamed with Bitcoin payments platform NYDIG to process Bitcoin (BTC) transactions and give Affirm users with a crypto account.

The application allowed users to create a plan in which monthly interest from a user’s savings account was automatically converted into BTC.

However, according to the Affirm website, Affirm’s cryptocurrency program will formally stop on March 31:

“On March 2, 2023, the ability to acquire bitcoin using the Affirm app will be discontinued. The Affirm Cryptocurrency Program will be phased out on March 31, 2023.

“Any bitcoin remaining in your account at the end of the program will be sold at the CME CF Bitcoin Reference Rate (BRR) as of 4:00 p.m. London Time, with the proceeds put into your Affirm Savings account,” the statement said.

The closure is part of a bigger employee purge at the San Francisco-based lending platform. Levchin stated that the 19% labor cut went into effect today.

In a Feb. 8 email to workers, Levchin accepted responsibility, explaining that he reacted too slowly to Federal Reserve activities in the United States:

“Everything changed in the middle of 2022. The Fed boosted its benchmark rate at an unprecedented rate over the previous three quarters. This has already depressed consumer spending and drastically increased Affirm’s borrowing costs. The main reason of our current situation is that I moved too slowly as macroeconomic shifts emerged.”

According to LinkedIn data, around 2,593 people claim to be employed at Affirm.

This suggests that the statement today most likely affected 500 people.

Cointelegraph contacted Affirm to inquire about the number of workers affected by its crypto program, but no more information was provided.

In the letter, the CEO did note that he expects the present headcount to stay virtually flat for the foreseeable future.

According to Google Finance, the price of Affirm’s shares, symbol AFRM, has dropped 19.1% in after-hours trading on the NASDAQ.

 

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