After a 19% employee layoff, payments operator Affirm will end its cryptocurrency initiative.
Users will be unable to purchase Bitcoin after March 2, and the “Affirm Crypto Program” will close on March 31.
Affirm’s CEO, Max Levchin, has confirmed that the company’s “Affirm Crypto Program” will be discontinued due to dwindling consumer spending and a changing macroeconomic environment.
On February 8, the CEO issued a letter to shareholders, along with a 19% staff reduction. He cited two main reasons for the decision: uncertain macroeconomic conditions and the need to offset some liabilities on the firm’s balance sheet:
“In a period of increased economic uncertainty, we are doubling down on our core businesses, delaying projects with less certain revenue timelines, and aligning our operating expenses with revenue. Concurrent with reducing our workforce, we are sunsetting several initiatives, such as Affirm Crypto.”
Michael Linford, the firm’s chief financial officer, stated that the decision was made to meet profitability targets.
“We’ve taken decisive steps to cut costs. “We believe our cost base is now appropriately sized to meet our profitability targets while also supporting our product roadmap and long-term growth objectives,” he said.
Affirm, like Afterpay, is a millennial-focused payments service provider that allows customers to buy a product online and pay later.
The company launched the “Affirm Crypto Program” in late 2021, near the peak of the crypto market, partnering with Bitcoin payments platform NYDIG to process Bitcoin (BTC) transactions and provide Affirm users with a crypto account.
The programme allowed users to create a scheme in which monthly interest from a user’s savings account was automatically converted into BTC.
However, according to the Affirm website, Affirm’s cryptocurrency programme will officially close on March 31:
“On March 2, 2023, the ability to purchase bitcoin through the Affirm app will end. We will be discontinuing the Affirm Cryptocurrency Program on March 31, 2023.
“Any bitcoin remaining in your account at the end of the programme will be sold at the CME CF Bitcoin Reference Rate (BRR) as of 4:00 p.m. London Time, with the proceeds deposited into your Affirm Savings account,” the note continued.
The shutdown is part of a larger staff purge at the San Francisco-based lending platform. Levchin stated that the 19% workforce reduction went into effect on February 8.
Levchin took the blame, stating in a Feb. 8 note to employees that he reacted too slowly to Federal Reserve actions:
“Everything changed in mid-2022. Over the last three quarters, the Fed increased its benchmark rate at an unprecedented pace. This has already dampened consumer spending and increased Affirm’s cost of borrowing dramatically. The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded.”
According to LinkedIn, approximately 2,593 people claim to be employed at Affirm.
This means that the announcement most likely affected 500 people.
Cointelegraph contacted Affirm to inquire about the number of employees affected by its crypto initiative, but no additional information was provided.
In the letter, the CEO did state that he expects the current headcount to remain essentially flat for the foreseeable future.
According to Google Finance, the price of Affirm’s stock, ticker AFRM, has dropped 19.1% in after-hours trading on the NASDAQ.