Allegations of unexplained layoffs shadow Neo Financial – Winnipeg Free Press

The company, which received more than $1 million from the Manitoba government to create jobs, has been placating employees and has had a revolving door of workers, former employees say.

In November 2021, the then Progressive Conservative government announced $1.6 million for Neo Financial. Calgary-based emerging virtual bank recently established a Winnipeg office; its new money was used to create 300 jobs and train 32 new employees.

Since then, Neo Financial has created hundreds of jobs — 235.5 net new positions in Manitoba by mid-March 2024, data from a Freedom of Information request to the provincial government's economic development department shows.

However, the reason for the hiring was an unexplained layoff, the former employee said Free press.

Neo Financial also faced two complaints from employees under Manitoba Employment Standards that said they were fired without cause.

The business has been announced as a “unicorn” company, meaning it will reach a valuation of $1 billion in 2022.

It launched in 2019 and positioned itself as a tough brick-and-mortar bank with high-interest savings accounts and cashback offers at partner companies. The two co-founders of Winnipeg-grown startup SkiptheDishes, which later sold for $110 million, started Neo Financial.

The Free press corresponded with 10 ex-employees of Neo Financial in various departments, from management to customer service, who confirmed and communicated their layoff experiences or reasons for leaving the company in 2023-24.

Alexandre Kouassi-Lenoir started working at Neo Financial in February 2023. She worked for the company for nine months before starting a shift job as a bilingual customer service representative.

He recalled that several workers were being laid off in his department: “Today you are working; tomorrow that person is gone.”

“Today you are working; tomorrow that person is gone.”– Alexandre Couassi-Lenoir

One of the former workers said their position was posted online shortly after they were fired, but they were not told the reason for the termination. Another said the layoffs happened one at a time, “execution style.”

“It was very well organized and everyone knew exactly what to do,” said the former employee, who asked not to be named. “They are a (relatively) small company. It must not be so well structured.”

Some interviewees said that they did not get the exact reason for the termination.

When contacted, Neo Financial did not say how many Manitoba employees it has laid off starting in November 2021. With about 200 employees, headcount “remains stable,” Amanda Broos, the company's vice president, wrote in an email to People.

Neo Financial declined interview requests.

The issue of layoffs has surfaced at other Neo Financial offices. Samfiru Tumarkin LLP, an employment law firm with roots in Alberta, Ontario and British Columbia, has a website for Neo Financial severance pay.

The law firm declined to be interviewed, but a spokeswoman said it was “aware that these layoffs appear to be happening in Manitoba.”

The situation has caught the attention of the new NDP government in Manitoba. Economic Development Minister Jamie Moses said his department was aware of “very disturbing” reports of the layoffs and was investigating.

“If (Neo) can't keep the jobs in Manitoba, as outlined in the agreement, we're going to look at clawing back any of that money,” Moses said.

“If (Neo) can't keep jobs in Manitoba, as outlined in the agreement, we will consider returning any of that money.”– Jamie Moses, Minister of Economic Development

The government is monitoring grant transactions, he said. It allocates money based on Neo Financial's job creation reports. The company must retain the new positions for 2,080 hours or a year, a government spokesman said.

The Progressive Conservatives referred to a November 2021 news release when they asked for specifics about the grant. The investment came through the province's industrial expansion program.

Kouassi-Lenoir said she left Neo Financial because she felt undervalued. The workload wasn't worth the money, she said, and she felt micro-managed. He believed that the laid-off colleagues he knew were good workers.

“You're afraid of being next,” he said. “You don't want to make any mistakes.”

When he left in October, there were many new hires, Kouassi-Lenoir said. “People were coming and leaving, coming and leaving, so they were always hiring people.”

Some of the former employees were interviewed Free press marked the workplace as “poisonous”. Others have said they haven't had a terrible experience, but it depends on your manager and role.

The Free press The plaintiffs, who spoke on condition of anonymity, handled two Manitoba Employment Standards complaints against Neo.

Workers at senior and management levels are seeking money for unpaid overtime and vacation pay. One is asking for about $85,000 to serve between October 2021 and April 2023. The other is asking around $33,000.

The claims include workers' compensation claims for 2023 without cause.

They describe a “company-first culture” where working outside of normal hours is expected. One former employee says at a Neo meeting that they were told to “give up Christmas this year” to work on a big project.

Both employment standards requirements and former employees highlight the strong use of immigrant labor.

Neo Financial does not directly comment on active complaints.

“We take all claims very seriously,” Broos wrote in a statement, adding that the company “actively participates” in the employment standards process.

Manitoba Employment Standards has seen only two complaints against Neo Financial, a government spokeswoman said.

The Department of Labor and Immigration has not received notice of layoffs at Neo Financial. Employers who lay off 50 or more employees within four weeks must notify the labor minister.

Neo had received $1,042,917 of the $1.6 million grant by mid-March 2024, according to a Freedom of Information filing. The grant will expire on March 31, 2025.

Neo Financial is “looking to grow in the Manitoba market and technology ecosystem,” said Broos, adding that Neo is actively hiring for more than 20 positions.

He called Neo Financial “lucky” to avoid major job cuts. “While there have been individual separations related to performance or strategic business restructuring, this does not reflect a broader trend or large-scale layoffs within our organization.”

“While there have been individual separations related to performance or strategic business restructuring, this does not reflect a broader trend or large-scale layoffs within our organization.”– Amanda Broos, vice president of Neo Financial

Neo's severance packages meet or exceed all applicable statutory requirements and working hours comply with the law, Broos wrote.

The company has “zero tolerance for disrespect and toxicity.” The turnover is similar to other high-growth venture capital-backed tech startups, he added.

Neo's culture includes “open, honest dialogues, consistent feedback and the flexibility to pivot and shift alongside the rapidly evolving landscape of our sector,” Brose said.

Asked what percentage of employees at Neo are new immigrants, Broos said the Winnipeg tech group has nine people who have moved to Canada in the past three years. About 10 percent of the tech workforce is new or recent graduates, he added.

Kelly Fournell, CEO of Tech Manitoba, has not heard of layoffs at Neo Financial. Instead, the company seems to be constantly growing and hiring, he said.

“From what we've heard from leadership, things are going well and growth is part of their roadmap for the near future,” Fournel said. “They create great jobs that build the tax base we need in Manitoba.”

Neo Financial became a member of Tech Manitoba in 2021. The company sponsors Tech Thursdays, a weekly gathering of industry players. This is “huge” for the sector, Fournel said.

[email protected]