A Lehi company valued at $1.9 billion last year has laid off 200 workers, former manager says

The company said it has reduced and reorganized to “better deliver on our mission.”

(Chris Samuels | The Salt Lake Tribune) The headquarters of financial technology company MX in Lehi, Wednesday, Oct. 19, 2022. One of Utah's tech "unicorns," MX has laid off about 200 employees, a former manager said.

Less than two years after a $300 million infusion from investors made MX a so-called unicorn — a private startup that becomes valued at more than $1 billion — the Lehi-based company has laid off about 200 employees, a former manager said.

MX, which provides businesses with digital tools for working with financial data, declined to disclose the number of terminated employees. It said in an Oct. 12 post on its LinkedIn page: “Yesterday, we made the difficult decision to reduce the size of our team and reorganize the company to better deliver on our mission.

“Our people are the heart and soul of our organization. MX team members are more than employees — they’re our friends and family. They are talented, dedicated, and driven. We are grateful for their contributions and we are doing everything we can to help them transition to the next step in their career.”

To smooth the transition, MX offered multiple months of severance pay to all employees, a company spokesperson said.

But Anthony Rossi, formerly the head of proposals at MX, said he felt the layoffs were done without care for employees.

Rossi said that he, some other managers and lower level staff weren’t informed of the layoffs until the day they were announced. And the terminations were disorganized and out-of-touch, he said — for example, the company fired one employee over the phone while he was at a hospital as his wife underwent surgery, Rossi said.

The spokesperson said the one-on-one calls were intended to be more empathetic than mass communication, but that making all of the calls on the same day meant not all the circumstances were ideal.

Same-day layoffs are common in financial technology and banking industries, the spokesperson said, due to concerns that employees who know they are leaving could take company data.

Rossi said that “severance packages in this industry always contain some sort of gag order that restricts how people who sign for the package are allowed to speak about the layoff.” Deciding to speak to The Salt Lake Tribune “basically cost me $8,000 in severance,” which was a third of what other employees were offered, Rossi said.

“Unfortunately, after more than 8 wonderful years, I was laid off from MX,” one former employee wrote on LinkedIn. “Looking for another exciting opportunity to work with an amazing company.”

“Working at MX has meant so much to me over the last 3+ years, but all things come to an end at some point,” another former employee wrote. “I am so disappointed that things are ending this way, but it’s time to take the next step in my journey.”

Though MX was having financial challenges, Rossi said, he disagrees that the downsizing was necessary.

He was fired, he said, after he wrote in an unofficial group chat that he wanted the board and high-level executives to “bleed.” He used that language, he said, to refer to his belief that employees should unionize, to hold executives and board members financially accountable for what he called a “botched layoff.”

Rossi also criticized the company for having armed security guards present last week on Tuesday and Wednesday at MX, which he said created anxiety. The company spokesperson said the guards ensured everyone’s safety during an emotional time.

Founded in 2010, the company announced a $100 million financing round in June 2019, which it said brought its total equity financing to $175 million. At that point, co-founder and then-CEO Ryan Caldwell said, “MX has been growing rapidly while operating profitably the past two years.”

In January 2021, the company announced it had raised another $300 million and increased its market valuation to $1.9 billion. It had between 500 and 1,000 employees that year, according to state data that is reported in ranges.

Months later, MX recruited Goldman Sachs to help the company navigate a potential initial public offering (IPO), Barron’s reported.

MX co-founder Brandon Dewitt died of cancer later that year, and the company has been through substantial changes since then, Rossi said. In his opinion, “if things keep on their current path, MX may never recovery culturally or fiscally,” he said.

In January, new CFO Brian Kinion told the CFO Thought Leader podcast he planned to get MX “ready” for an IPO, in case the company were to decide to pursue one. His goal is to ensure MX is scalable, operating it as if it were a public company to ensure its finances will support its growth, a MX blog entry about the podcast said.

His past workplaces include seven public companies and he’s been involved in four IPOs, he said.

In June, MX announced it had grown its partner network, saying it now connects more than 13,000 financial institutions and technology companies, and most digital banking providers, “with a combined reach of over 200 million consumers.”

MX products assist companies to gather and analyze their own financial data, as well as allowing them to offer tools, like the MoneyDesktop budgeting program, to customers. ”We provide [data] aggregation, [data] enhancement, identity verification, money management and mobile banking,” Kinion explained on the podcast.

Jim Magats, a former senior executive at PayPal Inc., was named MX’s new CEO in July, with his start date in August.

The company linked to a Google Sheets file on its LinkedIn post, encouraging other businesses to look at the list of employees who opted in to having their names and information put on the list. “We’d love to connect you with some of the best talent in fintech,” the post read. The file had 52 entries on it as of Tuesday afternoon.

Correction, 2:03 p.m. Friday, Oct. 20: This story has been updated to clarify that Anthony Rossi’s comments were directed at the board and high-level executives specifically, rather than management in general.

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Leto Sapunar is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep him writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.