When fintechs cut back staff and claw back pensions
Stripe, the payments fintech and one of the most valuable privately held companies in the world, has been clawing back pensions from the employees it’s fired. But only in Ireland.
The move – which is perfectly legal in Ireland – has been brought to wider attention after the company announced it was letting go of around 1000 global staff, or 14% of the company. Clawing back pensions is both an accepted and common practice in the Republic. The two-year clawbacks apply to all staff who leave Stripe in Ireland, and are not limited to the recent layoffs.
Stripe declined to comment, but we understand that the clawbacks do not apply to staff in the UK or the US.
Crucially, the Irish pension clawback only applies to employees that had been with the company for less than two years – although given the norm is “last in, first out” in the industry, it wouldn’t be a surprise if the vast majority of those losing their jobs had joined the firm within the last two years.
Various former employees and unrelated professionals on Blind – the social network – note however that the company offered a “decent severance package”. Another praised the plan for Stripe's RSU (Restricted Stock Units) vest on an accelerated timeline after layoffs.
Stripe’s layoffs and Irish pension clawbacks come as the company has pushed back its IPO date. This has caused tribulation internally as the value of RSUs has fallen - although, granted, it's said that it is perfectly happy being a private company for now. The company reached a valuation high of $95bn in 2021, which has since been reduced by 33%.
Given that the stock can range between 32% and 53% of total compensation at Stripe, that’s a hefty reduction in compensation.
“We overhired for the world we’re in,” founders (and brothers) Patrick and John Collison told the company’s employees in an email, “but we’re going to do our best to treat everyone leaving as respectfully as possible.”
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