LONDON (Reuters) - Digital bank Monzo is cutting up to 120 jobs, according to an internal note seen by Reuters on Wednesday, as the impact of the coronavirus pandemic on its business begins to bite.
The bank, founded in 2015, as recently as February told Reuters it planned to hire around 500 people this year as it aimed to continue its rapid growth.
The pandemic however has since made the outlook worse.
“Unfortunately we haven’t been able to achieve the goal of preventing the risk of redundancy at this time. It’s genuinely heartbreaking to share the news,” the memo said.
The redundancies will fall in Monzo’s Head Office and operations teams and are not linked to staff that volunteered to be furloughed in March although there could be some overlap, a source with direct knowledge of the plans told Reuters. The cuts are equivalent to around 8% of its workforce.
“The government has been clear the furlough scheme should not be abused if redundancies are planned anyway. This was based on our understanding of the impact of the crisis,” the source said.
Discussions with investors over a fundraising round - reported to be between 70 million and 80 million pounds - are ongoing, the source said.
The loss-making bank has burned through cash to fuel growth up to more than four million users and launched in the United States last year.
Reporting by Iain Withers and Lawrence White; Editing by Elaine Hardcastle and Peter Graff
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