Varo Bank has become the latest fintech player to make job cuts, axing 75 positions as it looks to cut costs in the face of worsening economic conditions.
In a message to staff, CEO Colin Walsh says the cuts - which represent about 10% of Varo's workforce - are needed to make sure the firm has sufficient capital to "execute on our strategy and path to profitability".
The lender is also limiting hiring and pulling back on marketing expenses as it seeks to decrease its burn rate.
In September, Varo raised $510 million in an oversubscribed funding round. But, as reported by Forbes, the firm has been spending about $80 million a quarter in the last six quarters, far exceeding revenues.
Founded in 2015 by former Wells Fargo executive Walsh, Varo became the first US consumer fintech firm to be granted a national bank charter in 2020, enabling the digital challenger to offer a full suite of FDIC-insured services.
The company is now setting up a new business unit, Varo Tech, which will bring together technology, design, data and product functions under a single umbrella in order to increase pace and reduce costs.