Nubank shutters investment area as LatAm fintechs join global tech layoff wave

Nubank, the largest digital bank in Latin America, announced it was no longer serving its clients with investment advisory, cutting its headcount by 40 amid a wave of fintech and technology layoffs in Latin America and the rest of the world.

The decision from the Brazilian neobank is the latest illustration of how fintechs and big techs across the globe are resizing amid a more challenging environment. This week, U.S.-based giant PayPal announced a much bigger cut: 7% of its workforce to reduce costs.

On Tuesday, the Warren Buffett-backed fintech in Brazil shut down its investment advisory product. It was a complementary service to its investment unit, which, the company said, was only being used by a small number of its 70 million customers. Those with access received guidance on investment decisions.

Nubank said in a note that it had already increased its workforce from 6,000 to 8,000 in 2022, according to Brazilian media. “The company continues to hire at the appropriate pace for its business plans in 2023,” it reportedly said in a statement.

A broader trend of fintech layoffs

Nubank’s decision is not isolated in the context of multiple layoffs in the fintech industry. According to the Brazilian newspaper Folha de Sao Paulo, domestic startups have already announced 1,300 job cuts this January, many of which stemmed from the fast-growing fintech sector.

This January, PagSeguros cut 7% of its workforce, or close to 500 employees, and there was a similar announcement by Will Bank, another fintech.

The announcement comes in the face of massive layoffs in the tech industry worldwide, with Google cutting 6.4% of its workforce, Meta 13%, Salesforce 10%, and Microsoft 4.5% in the last months.

The cuts come on the heels of accelerated hiring over the last five years. 

“After years of continuous growth of our team, we are implementing a reduction of around 7% in the total number of professionals, from different areas, to improve the company’s efficiency,” said PagSeguros in a statement to Brazilian media.

A fast-growing segment

“Fintech was the sector that grew the most in recent years,” Jihane Halabi, a fintech advisor and book author in Brazil, told Fintech Nexus. “With an almost inexhaustible source of capital, it was natural for these companies to leverage and expand their headcount. Hence, they suffer the most from the reversal in prospects for venture capital investments.” 

Fintechs cuts, she said, have been primarily based on trimming the headcount in a bid to slash operative costs and extend the runway as long as possible.


Fintechs in Brazil is dealing with less funding available and risks of a recession and inflation eroding their clients’ financial position. Many lending fintechs in the region have scaled back lending, increasing requirements and improving the portfolio quality.

In an interview with Fintech Nexus, Kueski’s senior Marketing and Growth director Regina Moreno said the company was lifting requirements to grant loans to improve the overall portfolio quality. 

The trend is not likely to stop soon

Likely, the layoff trend will not stop in January. According to investment bank BTG Pactual, local media reported that online investment broker XP Inc could reduce as much as 18% of its workforce this year. The digital investment broker is facing pressure from investors, as its stock has more than halved from IPO prices.

Bolstered by a significant amount of capital, the Brazilian fintech ecosystem expanded massively in the past few years. According to a study by the Inter-American Development Bank, the number of companies grew from 230 in 2017 to 771 as of 2021.  

Last year, however, investment in Latin American and Brazilian fintechs felt the sting with a drop in venture capital flows.

Nubank's IPO in U.S. markets.
Nubank’s IPO in U.S. markets.

Fintech resilience to prevail

But despite the challenges, analysts are confident about the ecosystem’s resilience to wade through.

“The fintech ecosystem is strong enough to withstand this new scenario,” Halabi said. “It is a matter of reviewing strategy and redirecting efforts towards a more sustainable business. Certainly, some companies will suffer a lot, but I believe most of them will be able to adjust the sails in time in these rough waters.”

  • David Feliba

    David is a Latin American journalist. He reports regularly on the region for global news organizations such as The Washington Post, The New York Times, The Financial Times, and Americas Quarterly.

    He has worked for S&P Global Market Intelligence as a LatAm financial reporter and has built expertise on fintech and market trends in the region.

    He lives in Buenos Aires.