Monzo, the U.K. opposition bank, continues to be faced with difficult decisions linked to the coronavirus crisis and resulting financial downturn. Following the shuttering of its Las Vegas-based customer assistance office and practically 300 personnel being furloughed in U.K., the business has actually revealed internally that approximately 120 U.K. staff are being made redundant. Reuters first reported the news just moments earlier– which I have now verified based upon my own sources. According to an internal memo composed by brand-new CEO TS Anil, following an all-hands previously this afternoon led by Anil and Monzo co-founder and president Tom Blomfield, the bank is to make up to 120 roles redundant, despite previously mentioning that furloughs and pay cuts currently performed would indicate additional layoffs could be avoided. That no longer seems the case, with Anil describing that the existing financial situation isn’t anticipated to revert back to normal rapidly. I understand a complete consultation period for those workers potentially affected will now happen, as is specified under U.K. employment law.
In addition, Anil told personnel that in order to acknowledge their contribution, the bank will be waiving the one year” cliff”from their vesting schedule so that they will not lose on any shares due to them. The revealed layoffs add to an unstable time for Monzo in recent months, as it, together with many other fintech business, has attempted to insulate itself from the coronavirus crisis and resulting financial decline.
In April, I reported that Monzo was shuttering its customer assistance office in Las Vegas, seeing 165 consumer support staff in the U.S. lose their tasks. And just a few weeks earlier, we reported that the bank was furloughing as much as 295 staff under the U.K.’s Coronavirus Job Retention Plan. In addition, the senior management team and the board has volunteered to take a 25% cut in salary, and co-founder and CEO Tom Blomfield has decided not to take an income for the next 12 months.
Like other banks and fintechs, the coronavirus crisis has actually led to Monzo seeing customer card invest decrease in the house and (of course) abroad, indicating it is producing considerably less profits from interchange fees. The bank has actually also held off the launch of premium paid-for customer accounts, one of only a handful of recognized planned revenue streams, together with lending, of course.
And just recently, it was reported that Monzo is surrounding ₤ 70-80 million in top-up funding, to assist extend its coronavirus crisis runaway. As new and some existing financiers play hardball, the business has actually supposedly had to accept a 40% reduction in its previously ₤ 2 billion valuation as part of its last funding round last June, with a brand-new valuation of ₤ 1.25 billion.
Article curated by RJ Shara from Source. RJ Shara is a Bay Area Radio Host (Radio Jockey) who talks about the startup ecosystem – entrepreneurs, investments, policies and more on her show The Silicon Dreams. The show streams on Radio Zindagi 1170AM on Mondays from 3.30 PM to 4 PM.