Thought Machine cuts jobs in ‘cost reduction exercise’

Banking software company Thought Machine has cut dozens of jobs in a “cost reduction exercise” potentially affecting as many as 70 staff, UKTN has learnt.

Thought Machine CEO Paul Taylor said in a company-wide email, seen by UKTN, that the fintech is “currently going through a cost reduction exercise and as part of the process we have made the hard but necessary decision to reduce our global headcount”.

A source at the company told UKTN that the layoffs are expected to affect “50 to 70” staff in departments including quality assurance, user experience and sales.

UKTN has contacted Thought Machine for comment. Taylor was expected to address staff in a virtual company all-hands at 4pm today, but UKTN understands that this has now been changed to an in-person meeting to avoid leaks to media.

Thought Machine, which develops cloud-based banking software for firms like Lloyds, Standard Chartered and JP Morgan, was valued at £2.2bn after a $160m funding round in May 2022 that featured investment bank Morgan Stanley.

The Thought Machine job cuts came just seven months after the company underwent a major hiring spree, when it said it planned to boost its headcount by 23% from 550 to 675 people.

Today’s layoffs would mark a reduction of at least 7% from that target number, the most recent publicly available headcount figure.

At the time of the hiring announcement in March, Taylor said: “It’s not all doom and gloom in the technology sector. While many businesses are cutting staff, we are not taking this approach.

“We are proud of our strategic and selective hiring approach, our focus on hiring the best people in the industry, and our company culture.”

Earlier this month, The Times reported that Thought Machine was gearing up for an initial public offering (IPO) in London and was sounding out bankers to advise on the multi-billion-pound float.

UKTN’s source claimed the layoffs were part of a cost reduction ahead of Thought Machine’s IPO.

Thought Machine has raised a total of £490m since it was founded in 2014 by Taylor.