Monzo CEO won’t take salary for 12 months after limited number of staff offered voluntary furlough
Monzo, the U.K. challenger bank with over 4 million account holders, is taking a number of precautionary steps to help see it through the current coronavirus downturn, including voluntary furloughs and its CEO forgoing a salary, TechCrunch understands.
In an internal company-wide memo issued by co-founder and CEO Tom Blomfield, he tells the bank’s over 1,500 staff that he won’t be taking a salary for the next twelve months, and that the senior management team and board have volunteered to take a 25% cut in salary, as have other “Monzonaughts” within the company.
In addition, a limited number of Monzo’s U.K. employees are being offered voluntary furloughing for two months, as part of the scheme rolled out by the U.K. government to protect jobs during the coronavirus lockdown, which is already impacting many companies — not just Monzo — including several other fintechs I know of. Furlough ensures that employees still get paid even when work has decreased and that when things hopefully return to normal there is a job to come back to.
Although well capitalised, like other banks and fintechs, Monzo has seen customer card spend reduce at home and (of course) abroad, meaning it is seeing less revenue from interchange fees. New account signups have also slowed, as has customer support requests. It therefore makes sense to utilise the furlough scheme to help protect jobs in the future when demand picks up again. By making it voluntary, it also means staff with kids to home school or loved ones to take care of, can use the option to hopefully make their lives easier for the time being.
Specifically, I understand Monzo is accepting up to 175 furlough applications in customer support, and up to 120 applications from other parts of the business.
Meanwhile, at least one other U.K. challenger bank is using the government’s furlough scheme. Starling has confirmed that it has put 41 staff on furlough (see statement from Starling founder Anne Boden below). In contrast, Revolut tells TechCrunch it has no current plans to do so. As already mentioned, the scheme is available to U.K. companies right across the board and several startups, including fintechs, have already applied furloughing as a pre-cautionary measure.
Lastly, it should be stressed that none of the above should impact customers at Monzo, which, as a digital bank, is pretty well-positioned to operate during lockdown and with all staff already working from home. It is also a fully licensed bank, with customer deposits up to £85,000 protected as part of the U.K. government’s deposit protection scheme.
Comment from Anne Boden, founder of Starling Bank:
Starling has furloughed 41 people and is topping up their salaries to ensure they get 100%. Most of these employees are relatively new to the bank and have not completed their training, so are unable to work from home. The remainder are facilities staff who are not required at the moment.
The rest of Starling’s customer service team remains busy.
Starling is well-funded, our TV ad campaign is doing extremely well and we are still growing fast, adding new business and personal customers every day. It’s business as usual and no-one is taking a pay cut.