Visa now lays off hundreds in the Bay Area despite turning a whopping $19.7B profit, further gapping public trust in America’s corporations.
San Francisco-based Visa, one of the most profitable payment processing companies in the world, has begun laying off hundreds of employees in the Bay Area, a move that comes shortly after being hit with a monopoly lawsuit by the Justice Department.
The cuts were announced last Thursday through a WARN (Worker Adjustment and Retraining Notification) document, which is typically required for mass layoffs.
According to the notice, 192 layoffs are set to occur in San Mateo, with an additional 10 positions eliminated at Visa’s headquarters in Mission Bay.
These layoffs add to the 91 previously announced in early November, bringing the total number of recent job losses to over 290.
The layoffs primarily affect upper management, with the latest round impacting two senior vice presidents, five vice presidents, 29 senior directors, and 23 directors.
In addition, dozens of engineers and technical program managers have also been let go.
Many of the affected employees have turned to LinkedIn to share their experiences and search for new job opportunities, reflecting the shock and uncertainty many are feeling.
These WARN notifications align with earlier reports from the Wall Street Journal, which indicated that Visa was planning to cut approximately 1,400 jobs, with about 1,000 of those positions in technology.
In a September filing with the Securities and Exchange Commission, Visa reported a workforce of around 31,600 employees, indicating that these layoffs represent a notable reduction in its headcount.
Despite these layoffs, Visa has been experiencing record profits. In its 2024 fiscal year, which concluded in September, the company reported a staggering profit of $19.7 billion on $35.9 billion in revenue.
This financial success has led to a nearly 20% increase in Visa’s market capitalization since January, pushing its valuation to $603 billion and solidifying its position as one of the largest public companies in the United States.
Visa spokesperson Fletcher Cook addressed the layoffs in a statement to SFGATE, confirming that the recent job cuts are part of the previously reported reduction but refraining from confirming the total of 1,400 employees.
Cook mentioned that laid-off workers would receive severance packages, as well as counseling and outplacement services to assist them during this transition.
“We expect to grow the number of employees at Visa this year, next year, and for the foreseeable future,” Cook stated.
However, she emphasized that the company continuously evolves its operational model to enhance client service and foster innovation, which may result in the elimination of certain roles.
The layoffs and legal troubles come at a precarious time for Visa, which is currently facing a civil antitrust lawsuit filed by the Justice Department in September.
This lawsuit alleges that Visa is using its substantial market power to maintain an illegal monopoly in the debit card sector, resulting in higher costs for merchants and banks that are ultimately passed on to consumers.
This legal battle follows the Justice Department’s previous efforts to block a merger between Visa and the San Francisco tech startup Plaid in 2021, citing similar antitrust concerns.
In response to the lawsuit, Cook defended Visa’s operations, asserting that the company operates in a competitive landscape filled with various payment solutions.
She characterized Visa’s network as secure and reliable, countering claims of monopolistic behavior.
This defense echoes comments made by Visa CEO Ryan McInerney during an October earnings call, where he referred to the lawsuit as “meritless” and indicative of a misunderstanding of the payments ecosystem in the United States.
McInerney expressed confidence in Visa’s ability to defend itself, insisting that the company competes vigorously for every transaction in a growing debit market that continues to welcome new entrants.
As Visa navigates through layoffs and legal challenges, the coming months will be critical in determining how the company adapts to these pressures while maintaining its status as a leader in the financial technology sector.
The situation underscores the complexities of balancing operational efficiency, legal compliance, and sustained growth in a highly competitive environment.
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