, 2022-11-01 14:07:07,
(Bloomberg) — Intuit Inc. is pausing hiring in its Credit Karma unit as souring business sentiment is slowing the pace of lending.
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Almost all new hiring in the division will be paused as the company sees “revenue challenges due to the uncertainty of the economic environment,” Chief People Officer Colleen McCreary wrote in a letter to employees last Sunday that was shared with Bloomberg. Departing workers will continue to be replaced, and there will be no pay cuts, she wrote.
“Our partners worry about lending products among high inflation, potential for rising unemployment and the possibility of recession, which results in fewer opportunities for us to provide products for a broader range of members,” according to the letter.
Many tech companies and startups have paused hiring or cut jobs this year amid a tough economic environment. After the Credit Karma hiring freeze email went out, employees and prospective new hires turned to the anonymous online forum Blind to discuss whether pending job interviews and offers would be kept. In her email, McCreary said that 500 new segment employees have joined in the past five quarters, and there are about 100 people that have either been given an offer, or accepted one and haven’t started yet.
Intuit shares fell as much as 9.5% Tuesday in New York, the biggest intraday decline in almost six months. The stock had dropped 34% this year through Monday’s close.
The reaction is “likely reminding investors that it is tough to find ‘safe places’ in a broad downturn,” wrote Barclays analyst Raimo Lenschow. It may also signal investor fear in additional Intuit weakness beyond Credit Karma, wrote BMO Capital Markets analyst Daniel Jester.
“Like most companies, Credit Karma is keeping a close eye on the current economic conditions and we have gotten more conservative with our hiring,” a Credit Karma spokesperson said. “We are still hiring for some open roles but this move allows us optionality as a business.”
Credit Karma, which provides credit scores and connects users to loans, was acquired by Intuit for $7.1 billion in February 2020. It has been among the fastest-growing segments in Intuit’s portfolio, with sales expanding as much as 48% in 2022’s third fiscal quarter. However, the company sees a slowdown to 10% to 15% growth in fiscal year 2023.
Intuit is set to report earnings at the end of the month, and has projected revenue growth of about 24%. Bloomberg…
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