Robo-advisor Betterment is laying off 28 staff members and closing its Philadelphia office, a company spokesperson confirmed Thursday.
In a filing with the Securities and Exchange Commission last week, Betterment reported having 397 employees, excluding clerical workers.
"Our business is not immune to the effects of market volatility, or to the record levels of inflation that have pushed operating costs up in all areas," the representative said.
"Throughout 2022 we took steps to adjust to the new economic reality: We tightened spending and slowed hiring. As we examined our 2023 outlook, we determined it made business sense to further cut expenses through headcount reductions.
"We can also confirm that we are closing our Philadelphia office. The reduction in force did not eliminate all the roles in Philadelphia; we just decided to close our office space there. We still have multiple individuals who reside in the Philadelphia area."
Business Insider reported Wednesday that CEO Sarah Levy informed the staff about the layoffs in an email that day.
The firm spokesperson didn't immediately address reports that Betterment is subleasing a floor in its New York City offices.
David Goldstone, investment research manager for Condor Capital Wealth Management, which publishes the Robo Report and Robo Ranking, suggested via email Thursday that Betterment has thin margins if it's profitable.
"Betterment has clearly refocused on profitability and efficiency. They recently just announced they are charging $4 per month for clients with platform assets less than $20,000 unless they meet a recurring deposit requirement. This change in fee structure likely aims to generate sufficient revenues from small clients to service them at cost or at a profit," Goldstone said.
