Monzo, the U.K. challenger bank, will cut up to 120 jobs as a result of the coronavirus pandemic.
According to an internal note seen by Reuters on Wednesday, the bank told employees: “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 digital bank, which was founded in 2015, announced earlier this year that it was about to hire up to 500 more staff this year as it sought to continue its rapid expansion. According to per bank data covering Q4 2019 from the Current Account Switch Service (CASS), the biggest winner of switching accounts was Monzo with 20,843 net switches (people who set up an account minutes people who left).
According to the mentioned internal memo (written by the new CEO TS Anil), the bank is to make up to 120 roles redundant. Monzo has been one of the first major challenger banks that introduced furloughs and pay cuts so layoffs could be avoided.
However, job cuts still appeared as a necessary measure with TS Anil explaining that the current economic situation isn’t expected to revert back to normal quickly.
“The government has been clear that 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.
This source told Reuters that staff who had volunteered to be furloughed in March are not linked to these new layoffs, but that there could be some overlap.