Brex Cuts 20% of Workforce and Reduces Layers of Management

Spending management company Brex has laid off 282 people — about 20% of the workforce — as part of a restructuring.

“Today we’re restructuring Brex to become a high-velocity company,” Pedro Franceschi, founder and co-CEO of Brex, said in a message posted on the company’s website Tuesday (Jan. 23). “While our strategy and mission remain the same, we’re making some important changes today that will increase the intensity and quality of our execution.”

Franceschi said there is a “massive opportunity ahead” for the company’s spend management solutions but that the Brex organization grew too quickly and was not moving as quickly as it did in the past.

Looking at the company’s current structure, Franceschi and Brex founder and co-CEO Henrique Dubugras decided to “reduce the number of layers between leaders and the actual work that affects customers,” according to the message.

Going forward, Brex is reducing layers of management, emphasizing long-term thinking and ownership in its comp structure, changing its operating model so that leaders operate at all levels, and expanding on financial improvements it made last year, when it grew gross profit by 75%, the message said.

“While we’re proud of those accomplishments, we still have a way to go to ensure high-velocity growth and profitability for years to come,” Franceschi said in the message. “Combined, these changes enable us to get there and become cash flow positive with the money we have in the bank.”

Franceschi also announced several changes to the leadership team as part of the company’s effort to flatten its org structure. Michael Tannenbaum is transitioning from chief operating officer (COO) to a Brex board member. Camilla Morais is being promoted to COO. Cosmin Nicolaescu is transitioning from chief technology officer into an adviser role. James Reggio is being promoted to vice president of engineering.

In addition, Morais, Reggio, Chief Financial Officer Ben Gammell and Vice President of Design Matt Bango will now report directly to Franceschi, the message said.

It was reported on Jan. 12 that several prominent companies recently announced plans to cut jobs as part of a continuing push for efficiency and cost reduction.

Amazon, Citigroup, Xerox, Google and BlackRock were among the companies that made cuts during the first two weeks of the new year.