- Checkout.com reduced its workforce by nearly 25%, laying off 230 employees due to a significant revenue drop.
- The company’s valuation plummeted from $40 billion in 2022 to $9.35 billion in 2023, partially due to its split with Binance.
What happened: Checkout.com faces financial setbacks, lays off 230 employees
UK-based payments processor Checkout.com is navigating through turbulent waters after facing substantial financial setbacks. In a bid to reduce costs and streamline operations, the company has laid off 230 employees, nearly a quarter of its workforce.
This decision comes as a direct result of a steep decline in revenue and a reduction in transaction volume. For the year 2023, Checkout.com reported a 13% decrease in processed transactions, down to $204 million, alongside a 23% drop in gross profits, which fell to $57 million.
The downturn in the company’s financial performance is linked to the termination of a major partnership. Checkout.com ended its relationship with Binance, the world’s largest cryptocurrency exchange, in 2023.
The split, which was initiated by Checkout.com, was reportedly driven by concerns over potential money laundering risks associated with Binance’s operations. This decision led to a legal dispute between the two parties, further complicating the company’s position.
Despite the setbacks, Checkout.com has emphasized that cryptocurrency transactions are no longer a major focus for the company. The firm noted that crypto transactions account for just 4% of its overall business volume.
Meron Colbeci, the company’s Chief Product Officer, stated that focusing on too many ventures could detract from the company’s core mission. With this shift in priorities, Checkout.com aims to regain its financial footing by focusing on its core payment processing business, avoiding further distractions.
Also read: iRobot cuts 16% of workforce in latest layoffs
Also read: Netflix layoffs: Key executives depart as company restructures
Why it’s important
The layoffs and the drastic reduction in valuation highlight significant challenges within the payments processing sector, especially as companies try to balance growth with regulatory scrutiny. Checkout.com’s decision to scale back its crypto ambitions suggests that the volatility in the cryptocurrency market is forcing companies to re-evaluate their long-term strategies.
The termination of the partnership with Binance underscores the increasing regulatory pressure on crypto-related businesses and could signal a broader trend among payment processors distancing themselves from the crypto market.
These developments serve as a warning to investors, employees, and industry leaders, signaling that even large players in the financial technology sector are vulnerable to shifts in market conditions and regulatory landscapes.
The sharp drop in Checkout.com’s valuation is a critical reminder of the volatility that can accompany rapid growth and the importance of sustainable, diversified business strategies.
