According to Affirm’s CEO, Max Levchin, users of the payment provider will not be able to buy Bitcoin after March 2 and it will discontinue the “Affirm Crypto Program” on March 31.
On February 8, a letter to shareholders and a 19% personnel reduction were both announced. The two primary factors that led to the decision, according to Affirm’s CEO, were the macroeconomic environment’s uncertainty and the need to offset certain obligations on the company’s balance sheet:
“In a period of increased economic uncertainty, we are doubling down on our core businesses, delaying projects with less certain revenue timelines, and aligning our operating expenses with revenue. Concurrent with reducing our workforce, we are sunsetting several initiatives, such as Affirm Crypto.”
According to the company’s chief financial officer, Michael Linford, the choice was taken to achieve profitability targets.
“We have made firm decisions to cut costs. We think our cost base is now structured correctly to achieve our profitability targets while also advancing our product roadmap and long-term expansion plans,” the executive stated.
Similar to Afterpay, Affirm is a payments service provider targeted towards millennials that enables clients to make an online purchase and pay later.
The company teamed with Bitcoin payments provider NYDIG to process Bitcoin (BTC) transactions and offer Affirm customers a crypto account, launching the “Affirm Crypto Program” late in 2021, just as the cryptocurrency market was reaching its high.
With the help of the software, customers could set up a system where monthly interest from their savings account would be automatically converted to Bitcoin.
On the Affirm website, it is stated that the cryptocurrency program will formally end on March 31:
“On March 2, 2023, the ability to purchase bitcoin through the Affirm app will end. We will be discontinuing the Affirm Cryptocurrency Program on March 31, 2023.
The message further said that any bitcoin still in your account at the conclusion of the program will be sold at the CME CF Bitcoin Reference Rate (BRR) as of 4:00 p.m. London Time and the profits would be put into your Affirm Savings account.
The closure is undoubtedly a part of the San Francisco-based lending platform’s bigger employee purge. Levchin said that as of February 8th, their personnel had been reduced by 19%.
Levchin accepted responsibility for his sluggish response to the Federal Reserve of the United States measures in a memo to staff on February 8:
“Everything changed in mid-2022. Over the last three quarters, the Fed increased its benchmark rate at an unprecedented pace. This has already dampened consumer spending and increased Affirm’s cost of borrowing dramatically. The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded.”
According to the most recent LinkedIn statistics, 2,593 people claim to work at Affirm. This indicates that the announcement probably had an effect on 500 individuals.
However, the CEO did mention in the letter that he anticipates that the present headcount will largely stay the same for the foreseeable future. According to Google Finance, the price of Affirm’s shares, symbol AFRM, has dropped 19.1% in NASDAQ after-hours trading.
