CEO Adam Dodds said the difficult decision would help ensure Freetrade’s cash runway, and put the company on a strong financial footing.
During an all-hands meeting yesterday challenger stockbroker Freetrade announced a wave of redundancies that could impact up to 15 per cent of its staff.
The decision comes just weeks after the business raised £30m through a loan agreement with existing and new investors.
“I’ve reached the difficult conclusion that we need to reduce our headcount,” Dodds wrote on an internal Slack message seen by AltFi.
“This is a tough decision. Nobody ever wants to have to do this.”
Based on Freetrade’s current headcount of just under 300 staff spread across offices in London, Stockholm, Vancouver and Brisbane, the redundancies could impact up to 45 employees.
The decision comes just days after AltFi exclusively revealed Curve had started redundancies expected to impact between 60-70 staff and Klarna began to cut around 10% of its staff, while several other fintechs also announced hiring freezes and job cuts.
All are pointing to changing market conditions and a slowing economy which is making it more challenging for high-growth startups to reach profitability and raise additional capital.
“It’s essential that we take this action now so that we can put Freetrade in a position to succeed in the short term and the long run,” Dodds explained to staff.
“Global stock markets have been falling and funding for businesses like ours has slowed. It’s essential that we focus now, more than ever, on building a sustainable business on a strong financial footing.”
“By taking this difficult step now, we will ensure we can preserve our cash for as long as possible.”
For now Freetrade is offering all staff the chance to apply for voluntary redundancy, with the hope that it will reduce the number of compulsory redundancies required.
Late last month the challenger stockbroker filed its latest accounts at Companies House, showing a 256 per cent jump in registered users to 886,743 during the year ending September 2021.
During the same period, its revenue increased by nearly 650 per cent to £12.7m, while its losses slightly more than doubled to £18.2m.
Finally, while Freetrade’s assets under administration during the period grew to £897.5m—up from £249.1m the year before—the company said that shortly after the end of its accounting period its AuA reached £1bn.