Recommended: Listen to this story (05:07 - 10:07):

The Story: On Tuesday, fintech startup Brex announced layoffs of 282 employees—about 20% of its staff. The decacorn (meaning a private company valued at over $10 billion) is reported to be facing stalled growth and high burn as 2024 begins.

In addition to the layoffs, Brex also shared that COO Michael Tannenbaum and CTO Cosmin Nicolaescu will be stepping away from their roles. Tannenbaum will become a board member and Nicolaescu will become an advisor.

Brex’s co-founder and co-CEO Pedro Franceschi wrote to employees stating that the company’s comp structure is now, “emphasizing long-term thinking and ownership over short-term gains.”

This isn’t Brex’s first time announcing a large layoff, however. A company restructure in October of 2022 led to 136 employees being let go, more than 10% of staff.

Related to this most recent slew of layoffs could be the reported $17 million per month Brex burned in Q4 of 2023. The Information reports that the company claimed to only have “enough cash to last through March 2026.”

A spokesperson for Brex disputes this, however, telling TechCrunch that the company’s cash runway is actually now four years and that “...cherry picking certain months for financial burn is not the correct way to look at burn.”

Expert Take: Ansaf Kareem, founding and managing partner of Latitude Capital, does not see Brex’s burn rate as a particularly worrying outlier in the fintech space.

He says, “There’s nothing in particular here that says that this is a bigger outlier than any other company… Obviously $17 million seems like a big number, but it’s hard to really understand that number without a broader context around the company profile, revenue, scale, cost-per-user, et cetera.”

Kareem believes Brex’s reduction and leadership restructure is likely for the purpose of “trying to make sure they can continue to guide the company towards a path for a successful IPO.”

*Stay informed about the three biggest stories in venture capital and tech news every weekday morning. 3-min reads only.