A climate-focused digital bank backed by celebrities has become the latest victim of economic headwinds in the financial sector, according to reports.
Aspiration Partners is facing layoffs of 180 employees next month, according to a Worker Adjustment and Retraining Notification (WARN) notice required under federal law for companies of a certain size.
The climate fintech firm, founded in 2013, pitched itself as an alternative to traditional banks by refusing to use customer deposits to fund fossil fuels, firearm manufacturers, or private prisons.
The start-up was backed by Hollywood A-listers including Robert Downey Jr, Cindy Crawford, Leonardo DiCaprio and Orlando Bloom.
More than half the staff will be impacted including remote workers and employees at the company’s headquarters in Marina Del Rey, California, according to the WARN notice.
The layoffs impact a number of departments and varying levels of seniority, including software engineers and customer representatives.
“The layoff is necessitated by the need to streamline and restructure the business in light of current economic conditions and the limited capital available to the company,” read the WARN notice, signed by Chief Executive Officer, Olivia Albrecht.
The Independent has contacted Aspiration for comment.
Described as a “climate action platform”, Aspiration provides companies striving to reach net-zero with carbon removal projects, like reforestation, to compensate for unavoidable greenhouse gas emissions.
It also offers digital banking for customers with an option to round-up purchases to the nearest dollar to donate towards tree planting initiatives.
The new cuts come after Aspiration laid off around 100 employees in December.
The first quarter of 2023 has brought tens of thousands of layoffs across the technology sector including at major players like Google, Microsoft, Meta, and Amazon.
Last month saw the collapse of Signature Bank and Silicon Valley Bank, a key funder of start-ups, and the biggest to fail since the 2008 financial crisis.
Digital banks, which became more popular during the pandemic, subsequently found customer acquistion costs were too high relative to revenue, Forbes noted.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies