Figure Layoffs 2023: reason behind why they cut jobs
Figure Technologies has made employee reductions to prepare for its initial public offering (IPO). Based on the records examined, the company let go of 90 employees or 20% of its workforce.
Figure Technologies started speaking with bankers to prepare for an IPO for its loan company planned for the following year. The documents provided more details on the company’s strategies.
An American startup called Figure Technologies uses blockchain technology to offer financial services. The business launched in 2018 and has its main office in San Francisco, California. FigureFigure has struggled to raise money during a slump in the market. The company has lost talent, like most firms in the crypto-adjacent sector. Let us view the business in detail in this article.
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Overview of the company
FigureFigure is revolutionizing the trillion-dollar financial services business using blockchain technology. The FigureFigure has set up several firsts in the fintech space in just four years. He created this using the Provenance Blockchain for loan origination, equity management, private fund services, banking, and payments sectors, delivering speed, efficiency, and savings to individuals and institutions.
FigureFigure is one of fewer than a thousand companies known as unicorns worldwide. The FigureFigure was launched in 2018 by serial technology entrepreneur Mike Cagney. He also started SoFi, which he led as CEO and grew into a multi-billion-dollar firm.
Figure’s first home equity loan with digital processing went live in October 2018. The fixed-rate “Figure Home Equity Loan Plus” is the company’s flagship offering. More than 1,500 HELOCs were granted by Figure between September 2018 and February 2019 for members covering 36 states.
By 2020, FigureFigure would have hired over 250 people and had operations centers in Charlotte and Reno. It had raised over $225 million in total capital. It would also have been valued at $1.2 billion. To explain to the public blockchain options, the business started running national advertisements using a mascot dubbed Blockchain that year.
Mortgage lenders Synergy One, Guaranteed Rate, and Homebridge joined forces with Figure in August 2022. Figure’s HELOC technology was to be utilized in this. This technology offers a home equity line of credit application and approval process that is entirely digital.
Provenance, the company’s Blockchain, is used for all commercial transactions. In honor of the off-chain transaction of fiat currency, the native token Hash is traded at several points along the
Loan creation and packaging process. The USDForward blockchain is also used to store transaction data. It is a stablecoin that is backed by fiat money. One of the FDIC-insured institutions that make up the USDF Consortium produces it.
On LinkedIn, the company is mentioned as “We’re Hiring!”
Cagney’s “Figure” Fires 20% of the Staff
According to records analyzed, Figure Technologies Inc. laid off 90 employees in July 2023. It makes up nearly 20% of its workforce. According to the documents, the company has already begun interviewing bankers to prepare for a projected initial public offering for its loan business early next year. A Figure spokesman declined to comment.
Mike Cagney is credited with co-founding FigureFigure. To create financial solutions using blockchain technology, Cagney founded FigureFigure. FigureFigure has struggled to raise money during an economic downturn in the market. Also, it has lost talent, like most firms in the crypto-adjacent sector.
However, the records show that the company has lately achieved financial milestones. During the second quarter of this year, Figure’sFigure’s lending business reached a record amount of $900 million. During the first six months of the year, it generated $83.5 million in sales. This is by a letter Cagney wrote to the investors and partners of Figure in July. According to Cagney’s report, FigureFigure made an adjusted profit of $2.7 million in the second quarter.
Figure’s lending operation is profitable, according to Cagney. He claimed in the letter that it has a contribution margin of over fifty percent. Because of its performance, executives have started discussions with bankers to go public with the “LendCo” segment early next year.
LendCo’s public valuation, according to Cagney, is expected to be $2.5 billion. The business’s other assets and market capitalization “should put us safely ahead of the last round price.” In a 2021 venture-backed investment round, FigureFigure was valued at $3.2 billion, according to Cagney.
The company’s initial round of layoffs occurred in July. Concerning its finances, the business has yet to respond. Some staff were shocked by the timing of the releases, given their excellent performances.
According to recent meeting minutes, many of the questions raised by employees during the meeting were deemed “too salty” to be read aloud. These layoffs included engineers, who made up about half of the workforce.
Engineering Senior Vice President Matt Conroy informed engineers of the layoff in a statement on an internal Slack channel. He asked the remaining staff to “please be kind” to the Figure leaders because “none of them liked making this move.”
Asserting that the “future is bright” for anyone who reads the message, Conroy also mentioned the company’s successful first half of 2023. He claimed its “ambitious aims going into 2024, with the IPO path for Lending, the potential IPO path for our Markets business,” and other items.
The remaining team members can be relocated to new product groups in the coming weeks.
What happened to the business?
According to sources from February, Figure Technologies had to lower its investment target due to the decline in venture capital. The business chose to reduce its initial goal by two-thirds. Instead of the higher amount that had been expected, it hopes to raise $100 million.
Additionally, FigureFigure was thinking of spinning off several of its product lines. This is to get around the challenging funding environment. Despite the difficulties, the business was approaching the $100 million fundraising goal.
Although no layoffs were planned then, Figure Technologies was considering restructuring. This was to separate its markets and payment operations from its loan segment.
According to co-founder Mike Cagney, the business had expanded operations to encompass fundamental banking services.
Some of these services include Figure Pay is a
- Banking-as-a-Service (BaaS) solution with a Visa debit card and integrated buy now,
- Pay Later (BNPL) and payday advance functions.
Figure provided these services using a platform created exclusively for FinTechs, nonbank businesses, and merchants, leveraging its embedded issuer processing capabilities.
Conclusion
Four of the top 20 independent mortgage banks (“IMBs”) have joined up with Figure Technologies Inc. In Figure’sFigure’s continued efforts to provide Home Equity Lines of Credit (“HELOC”) to more customers, its new partners mark another significant step.
Each of Figure’sFigure’s new partners uses the HELOC technology from FigureFigure to develop a branded product for their clients. New clients from these private label partners will be enabled to apply and be authorized in as little as five minutes. This is due to a fully digital application.
Procedure. From 41 states a year ago, Figure’sFigure’s product is now accessible in 45 states and Washington, D.C.
