BM Technologies Shifts Strategy, Cuts 25% of Workforce
BM Technologies has announced significant changes in its leadership and strategy. Jamie Donahue has been promoted to president, while James Dullinger takes on the role of chief financial officer, in addition to his current position as chief accounting officer. The company has also appointed investment banking veteran Raj Singh to its board. Meanwhile, BM Technologies is implementing a 'profit enhancement plan', including a 25% workforce reduction and cost-cutting measures, following the dissolution of its planned acquisition of First Sound Bank.
The fintech giant, which initially planned to combine its technology and banking-as-a-service expertise with a bank charter through the acquisition, has now shifted its strategy. Instead, it will focus on offering banking services in partnership with its sponsor bank. This change comes after the $23 million deal was called off due to regulatory delays.
BM Technologies expects to incur charges of $1.5 million to $3 million related to its cost reduction plan, with the majority occurring in the first quarter. The company aims to reduce expenses by $15 million in 2023. CEO Luvleen Sidhu attributed these measures to the high interest rate environment and inflation. The cost-cutting efforts also include reducing costs associated with third-party service providers.
With 275 employees, the 25% workforce reduction is expected to affect around 70 jobs. The company has not specified which departments will be most impacted.
These changes reflect BM Technologies' pivot in strategy and its response to the current economic climate. The company is positioning itself to enhance profitability while continuing to offer innovative banking services. The impact on employees and the company's future growth plans remain to be seen.
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