Aspiration, a fintech company based in California, is reportedly planning to lay off 180 employees in a company-wide restructuring effort. The job cuts will affect both remote staff and employees based at the company’s headquarters in Marina Del Rey, California. This is the second time in recent months that Aspiration has laid off workers, following a round of 100 job cuts in December.
According to a Worker Adjustment and Retraining Notification letter filed by the company and signed by CEO Olivia Albrecht, the layoffs are necessary to streamline and restructure the business in response to current economic conditions and limited available capital. The letter states that the affected positions have been identified and that the layoffs will begin on May 26th.
Under the federal WARN Act, workers generally must receive 60 days’ notice in advance of major plant closings and layoffs. California also has its own separate WARN law. Aspiration has declined to comment on the layoffs.
Aspiration is a digital bank that was founded in 2013 with a focus on environmental sustainability. Its unique feature was the ability for customers to round up their purchases to the nearest dollar, with the extra funds going to tree-planting non-profit organizations. However, Aspiration has recently announced a company-wide restructuring that will result in the layoff of 180 employees, including its chief administrative officer, Deepak Kumar.
According to reports, the neobank business model has proven to be more difficult than expected, with the cost of acquiring new customers being too high relative to the revenue generated from them.
As a result, in late 2021, Aspiration began to shift away from digital banking and towards selling carbon credits to businesses. The company’s focus on carbon offsets is based on the idea that businesses can mitigate their carbon footprint by funding projects that remove carbon from the atmosphere.
The layoffs will affect several departments, including product management, software engineering, and customer engagement. Aspiration’s chief of staff is also among the executives impacted by the layoff. The news of the layoffs was initially reported by the St. Louis Business Journal.
In 2021, Aspiration announced plans to go public via special purpose acquisition company (SPAC) Interprivate III Financial Partners Inc. However, the IPO deal deadline has been postponed three times, with the latest deadline set for May 1, 2023. This makes it the second-longest outstanding SPAC deal on the market, according to Julian Klymochko, CEO of asset management firm Accelerate, which invests in SPACs.