- Max Levchin, CEO of buy-now, pay-later platform Affirm, said it’s important to help your employees pack their boxes after you lay them off. Although he was “terrified of owning the responsibility that I screwed up,” he found the experience “between cathartic and therapeutic,” he told the 20VC podcast hosted by Harry Stebbings.
During layoffs, it's easier for CEOs to kick back in their corner offices and watch the chaos and weariness unfold. But one tech executive says he makes the conscious decision to be with his employees as they’re packing up their boxes and shipping out.
Max Levchin, cofounder of PayPal and CEO of buy-now-pay-later platform Affirm, said one of the biggest leadership lessons he learned was to help his newly laid-off employees move out of the office.
“I was terrified of owning the responsibility that I screwed up,” Levchin told host Harry Stebbings on the 20VC podcast published Wednesday. But a good friend told him that as a leader, he had to be there helping people pack their boxes and be part of their goodbye.
“You can play this from the comfort of your office or in the middle of the floor that's crying,” Levchin said. “Go be with the people. It'll feel better in the end, and they will feel better in the end.”
In 2023, Affirm cut 19% of its workforce, or 485 people, and laid another 140 people off in February 2024. At the time of the 2023 layoffs, Levchin called his decision the “single most difficult one,” but also admitted the company “consciously hired ahead of the revenue required to support the size of the team.”
On the 20VC podcast, Levchin acknowledged the choice in hiring ahead of revenue as one of his biggest calculated risks that didn’t pan out.
“You decide that you want every incremental engineer to build more features while the fundraising is good, and then suddenly it's not,” Levchin said. “There's nothing you can do other than to say ‘So sorry, but some of you cannot have a seat anywhere.’”
Affirm wasn’t alone in its 2024 cuts: Other payments companies—including PayPal, Brex, Block, and Klarna—did the same.
Helping his laid-off employees “was sort of between cathartic and therapeutic,” Levchin told Stebbings. “That was a really important lesson to learn. You cannot hide from the grief that a layoff is.”
Other CEOs haven’t handled layoffs with the same level of care. In 2021, Vishal Garg, CEO of online mortgage company Better.com, came under scrutiny after laying off 900 employees over Zoom. The affected employees' accounts immediately went dark, and Garg later admitted he “blundered” the layoff.
“Company culture is not just who you hire and fire, it's also how you do it,” Ralf Specht, author of Building Corporate Soul: Powering Cultures and Success With the Soul System, told the Society for Human Resource Management in December 2021. “The traumatic impact on those who were let go was immense.”
Despite layoffs, Affirm is clawing its way up the payments ladder, working to fulfill Levchin’s dream of taking down the credit card industry. The company’s first-quarter fiscal 2025 revenue was up 41% to $698 million.
“We're not the only company that built this buy-now, pay-later craze, but I’d like to believe that we ushered the change of financial services that really are for the people as opposed to against them,” Levchin said on Fortune’s Leadership Next podcast in November 2022.
