Many technology companies are
The nation's
A Betterment spokesperson cited external forces as the reason behind the cuts and added that the fintech firm would still have a presence in the City of Brotherly Love.
In Betterment's latest SEC Form ADV filing dated Feb. 10, the company had a total of 397 employees, not including clerical workers. Information about what positions were eliminated has not been released.
"We can confirm that 28 team members were laid off. Our business is not immune to the effects of market volatility, or to the record levels of inflation that have pushed operating costs up in all areas," the Betterment spokesperson said in an email. "We can also confirm that we are closing our Philadelphia office. The reduction in force did not eliminate all the roles in Philadelphia, we just decided to close our office space there."
The spokesperson added that the company took steps to "adjust to the new economic reality" throughout 2022, including a reduction in spending and hiring.
"As we examined our 2023 outlook, we determined it made business sense to further cut expenses through headcount reductions," the spokesperson said.
News of Betterment's downsizing
"While our hard work has helped, it makes business sense to further reduce expenses through headcount reductions," Levy wrote, according to the
The digital publication also reported that the New York-based robo-advisor would be subleasing a floor of its New York City office space, according to the email from Levy. However, David Goldstone, the manager of investment research at Condor Capital Wealth Management, which publishes the annual of the
"They recently just announced they are charging $4 per month for clients with platform assets less than $20,000 unless they meet a recurring deposit requirement," Goldstone said. "This change in fee structure likely aims to generate sufficient revenues from small clients to service them at cost or at a profit."
But Goldstone said the nature of the asset management business is that revenue tumbles as asset prices fall.
"With equity and bond markets both down significantly last year, this had a direct impact on revenues at Betterment. It is also a much more challenging environment to raise money as a growth company today than a year ago," he said. "I believe if Betterment is currently profitable, this only occurred in the last few years. Given the very low fees at Betterment, they must operate on razor-thin margins.
"At the same time, taking a hard look at expenses and making moves to be more efficient can be healthy for a company in the long run."
Goldstone added that while robo-advice is more than a decade old, the business model has been driven by venture capital fundraising for many of those years.
"It may be time for robo-advisors to prove they can operate profitably as stand-alone businesses," Goldstone.
With the cuts, Betterment has earned its unceremonious induction to the
According to the list, 377 global tech companies have suffered layoffs so far in 2023, resulting in a total workforce reduction of at least 107,930 people as of Friday afternoon.
"At least" is an important distinction as some of the confirmed cuts are missing the number of people laid off, meaning the real figure is likely higher than the current tally that eclipses the seating capacity of Michigan University's storied "Big House" football stadium.
When looking at the just the confirmed cuts made during the business week of Feb. 13 to Feb. 17, 4,914 tech employees have lost their jobs everywhere from the Bay Area and Boston, to Singapore and Tel Aviv.
Companies included in the 2023 tech bloodletting so far include 500 people at eBay, 600 at Spotify, 680 at DocuSign, 950 at Coinbase, 1,300 at Zoom, 10,000 at Microsoft and 12,000 at Google.
