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Stripe’s workforce turmoil highlights risks of layoff-hiring cycles

“Stripe, like many tech companies, has likely over-hired during their growth stage," said analyst Josh Bersin

Fintech company Stripe has announced its latest round of layoffs on Monday (20 January), cutting 300 employees, but has insisted that they will achieve targets to grow its headcount by 17% by December 2025.

The decision, revealed in a leaked memo, comes less than two years after Stripe reduced its workforce by 14%, impacting 1,120 employees.

Despite the latest layoffs, Stripe plans to grow its headcount by 17% this year. Stripe's chief people officer, Rob McIntosh, stated that the cuts were necessary to ensure “the right people in the right roles and locations” to meet strategic goals. 

“Stripe, like many tech companies, has likely over-hired during their growth stage. Companies like Meta, Google, and even Microsoft have done the same,” explained industry analyst Josh Bersin, speaking to HR magazine. 

“This happens because individual hiring managers believe in ‘growth through headcount’ rather than ‘growth through productivity and focus.’”


Read more: Spotify layoffs consequence of over-hiring epidemic, say experts


The move may raise questions about the broader impact of oscillating workforce strategies on employee wellbeing, organisational reputation, and HR’s role in fostering resilience.

Speaking to HR magazine, Tim Sackett, president of contingent staffing firm HRU Technical Resources, said: “You always want to hire for the business you want, not the business you have. The problem is, if you don't get the business you want, you're overstaffed and you have to layoff or you lose money.

“If you stay lean, so you don't have layoffs, and hire slowly, you probably miss out on revenue and, as a leader, your board is probably looking to fire you.”

Meanwhile, remaining employees may grapple with survivor's guilt and concerns over job security, which can negatively affect productivity and trust in leadership, said Teresa Angle-Young, an International Confederation Federation executive coach.

She said that it is important for organisations to ensure open communication and encourage employees to self-reflect when feeling these strong guilt-like emotions. 

“Encourage [your employees] to share their survivor guilt concerns with colleagues, or through confidential channels such as counselling services,” she said. 

Bersin noted that the “grow by hiring” model is going away. “Not only is it inefficient, but the job market is tight and it’s hard to find top engineers,” he said, noting the impact of this on the tech industry. 

“I’m sure that Stripe is looking backwards and hopefully making a series of decisions to stay more focused and build 'talent density' rather than 'headcount' strategy to grow.”


Read more: Avoid the rehire trap


Sackett added that instead of reactive layoffs, organisations can adopt proactive approaches such as workforce redeployment, reskilling initiatives, and flexible work arrangements. These measures can help companies adapt to shifting business needs while preserving jobs and retaining institutional knowledge.

“The obvious answer is to hire slowly, only hire and keep top performers, stay as lean as possible, and you'll avoid layoffs. That sounds easy, but it's difficult to pull off,” Sackett explained. 

“Something we see more and more companies do is to stay lean with a core staff, and supplement with gig workers and contractors during busy times, so that when lean times hit, you don't lay off your full time staff.”