Today, Brex Founder and co-CEO Pedro Franceschi sent the following note to Brex employees:

Team,

Today we’re restructuring Brex to become a high-velocity company. While our strategy and mission remain the same, we’re making some important changes today that will increase the intensity and quality of our execution.

Sadly as part of those changes, 282 people (roughly 20% of the company) will be leaving Brex today. Henrique and I are responsible for the decisions that led us here, and seeing so many talented folks go through this experience is never what you hope for as a founder. It’s incredibly hard to say goodbye, and we feel so grateful for their contributions building Brex into what it is now. We’re doing what we can do to ease the transition, and departing employees will receive:

• 8 weeks of severance, with two additional weeks of pay for each additional year of service.
• Waiver of the one-year equity cliff for those who haven’t reached theirs yet.
  
• Outplacement support for job search assistance, and impacted people will be able to keep their laptops to assist with the transition.
  
• Subsidized continued health coverage for 6 months through COBRA, including mental health support.
  

I also want to offer more context on how we got to this decision. Since starting Brex in 2017, we’ve had one goal: deeply integrating fintech and software into a single platform that empowers teams to make better financial decisions. We started as a corporate card, and in six years, became the leader in the spend management space. Today we’re proud to serve 1 in every 3 startups in the US, tens of thousands of businesses from public launch to global public companies, and in 2023 alone, hundreds of thousands of new customers’ employees that are now using Brex to make better financial decisions.

To continue capturing the massive opportunity ahead, we’re hyper-focused on building a high-velocity product and growth machine. Looking inward, I realized we grew our org too quickly, making it harder to move at the speed we once did. This year, we decided to take a hard look at our current structure, and reduce the number of layers between leaders and the actual work that affects customers. This resulted in today’s hard decision. In addition, we’re also making the following changes to how we run the company:

1. We’re flattening our org structure and reducing layers of management. Our goal is for leaders to operate closer to the metal, less siloed and more functionally, focused on few cross-company priorities. These changes begin with the leadership team and cascade across the org:

a. Michael Tannenbaum is transitioning from COO to a Brex board member. Camilla Morais is being promoted to COO and will report directly to me, together with our CFO Ben Gammell. Michael was our 2nd employee, and Brex wouldn’t exist without him. I can’t wait to continue working with Michael on our board.

b. Cosmin Nicolaescu is transitioning from CTO into an advisor role this summer. James Reggio is being promoted to VP of Engineering and will report directly to me, together with Matt Bango, our VP of Design. Cos played a critical role building our engineering org and product for over 5 years, and I feel so grateful for all his contributions to Brex.

2. We’re emphasizing long-term thinking and ownership over short-term gains in our comp structure. The opportunity ahead of Brex is massive, and we want everyone staying to have high conviction and financial upside in our equity.

3. We’re changing our operating model, expecting leaders to operate at all levels moving forward, promoting from within, increasing in-person collaboration in our hubs, and concentrating the time zones in which we operate.

4. We're expanding on the financial improvements from 2023. With our focus on financial software and high-quality growth, we grew gross profit by 75%+ last year. While we're proud of those accomplishments, we still have a way to go to ensure high-velocity growth and profitability for years to come. Combined, these changes enable us to get there and become cash flow positive with the money we have in the bank.

I’ll host an All Hands tomorrow to talk about how we’ll operate moving forward. While it’s incredibly hard to see so many talented teammates leave, I’m optimistic about this new phase of Brex: leaner, faster, and closer to customers.

This won’t be an easy change, but it’s a worthy one. While we’ve grown to hundreds of millions of dollars in revenue in a short span of time, Brex still serves less than 1% of the US market, and over the next few years, the opportunity ahead of us remains massive. Every single business needs to manage spend, and that’s much bigger than just helping them reduce costs. The goal of any finance team is to empower employees to make the best financial decisions that move their business forward. That’s precisely Brex’s mission and our right to win.

We have a unique opportunity over the next 5-10 years, and these changes will increase the intensity and quality of our execution, connecting us more deeply to customers needs, and putting us on a clear path towards profitability and independence. I feel so confident in this team’s ability to rise to the occasion and continue building a generational company.

Onwards,

Pedro