Allegations of unexplained layoffs shadow Neo Financial “Today, you guys are working; tomorrow, the person is just not there.” By: Gabrielle Piché Posted: 6:09 PM CDT Friday, Apr. 12, 2024

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A company that’s received more than $1 million from the Manitoba government to create jobs has quietly laid off staff and has become a revolving door of workers, former employees allege.

In November 2021, the then-Progressive Conservative government announced $1.6 million for Neo Financial. The burgeoning Calgary-based virtual bank had recently set up a Winnipeg office; its new money was tabbed for the creation of 300 jobs and the training of 32 already-hired employees.

Since then, Neo Financial has created hundreds of jobs — 235.5 net new Manitoba positions by mid-March 2024, data from a freedom of information request to the provincial government’s economic development branch show.

However, amid the hiring has been unexplained layoffs, a former staff told the Free Press.

Neo Financial is also facing two Manitoba Employment Standards claims by employees who say they were terminated without cause.

The business had been heralded as a “unicorn” company — meaning it had reached, in 2022, a $1-billion valuation.

It started in 2019, and positioned itself as challenging brick-and-mortar banks with its high-interest savings accounts and cashback offers at partner companies. Two founders of SkiptheDishes, a Winnipeg-grown startup that later sold for $110 million, began Neo Financial.

The Free Press corresponded with 10 former Neo Financial employees in various departments, from management to customer service, who confirmed and relayed experiences of layoffs or gave reasons for leaving the company in 2023-24.

Alexandre Kouassi-Lenoir began working at Neo Financial in February 2023. He spent nine months with the company, clocking in for shift work as a bilingual customer service representative.

He recalled a handful of workers being laid off in his department: “Today, you guys are working; tomorrow, the person is just not there.”

“Today, you guys are working; tomorrow, the person is just not there.”–Alexandre Kouassi-Lenoir

One former worker said their position was posted online soon after their layoff but they weren’t given a reason for their termination. Another said layoffs happened one at a time, “execution style.”

“It was so well-organized and everyone knew exactly what to do,” said the former employee, who asked to remain anonymous. “They’re a (relatively) small company. It should not be that well-structured.”

Several interviewees said they didn’t receive a clear reason for their termination.

When contacted, Neo Financial would not provide an answer to how many Manitoba staff it had terminated since November 2021. Staffing has “remained stable,” with about 200 employees, Amanda Broos, the company’s vice-president, people, wrote in an email.

Neo Financial declined requests for an interview.

The issue of layoffs has surfaced in other Neo Financial offices. Samfiru Tumarkin LLP, an employment law firm with roots in Alberta, Ontario and British Columbia, has a webpage dedicated to compensation for Neo Financial layoffs.

The law firm did not agree to interview requests, but a spokesman said he was “aware that these layoffs appear to be happening in Manitoba.”

The situation has caught the attention of the Manitoba’s new NDP government. Economic Development Minister Jamie Moses said his department learned of “very concerning” reports of layoffs and is investigating.

“If (Neo is) not able to… uphold maintaining the jobs here in Manitoba, we certainly would be looking at pulling any of that money back, as it’s outlined in the agreement,” Moses said.

“If (Neo is) not able to… uphold maintaining the jobs here in Manitoba, we certainly would be looking at pulling any of that money back, as it’s outlined in the agreement.”–Jamie Moses, Economic Development Minister

The government has been monitoring the grant transactions, he noted. It dispenses money based on job creation reports from Neo Financial. The company is required to retain new positions for 2,080 hours, or one full year, a government spokesperson said.

The Progressive Conservatives referred to their November 2021 news release when asked for specifics about the grant. The investment came through the province’s industry expansion program.

Kouassi-Lenoir said he left Neo Financial because he felt undervalued. The workload wasn’t worth the money, he said, adding he felt micro-managed. He believed the laid-off colleagues he’d known were good workers.

“You’re scared to be the next one,” he said. “You don’t want to make any mistakes.”

There were many new employees when he left in October, Kouassi-Lenoir said. “People were coming, quitting, coming, quitting, so they were always hiring people.”

Some of the former employees interviewed by the Free Press labelled the workplace “toxic.” Others said they didn’t have a terrible experience, but it depended on your manager and role.

The Free Press reviewed two Manitoba Employment Standards claims against Neo, on the condition of the claimants’ anonymity.

The workers, at senior and management levels, are seeking money for alleged unpaid overtime and vacation pay. One is asking for roughly $85,000 to cover their tenure between October 2021 and April 2023. The second is seeking nearly $33,000.

The claims include the workers’ 2023 notices of termination without cause.

They describe a “company-first culture” in which working beyond typical hours is expected. One former employee alleges they were told in a Neo meeting to “cancel Christmas this year” to work on a large project.

Both the employment standards claims and former employees underscore a strong use of immigrant labour.

Neo Financial would not comment directly on the active claims.

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

Manitoba Employment Standards has only seen two claims against Neo Financial, a government spokesperson said.

The department of labour and immigration hasn’t received notification of layoffs at Neo Financial. Employers terminating 50 or more employees within four weeks must notify the labour minister.

Neo had received $1,042,917 of its $1.6-million grant by mid-March 2024, according to the freedom of information document. The grant closes March 31, 2025.

Neo Financial remains “committed to growth in the Manitoba market and technology ecosystem,” Broos maintained, adding Neo is actively recruiting for upwards of 20 positions.

She called Neo Financial “fortunate” to avoid significant economic job reduction measures. “While there have been individual cases of separation due to performance or strategic business restructuring, these have not been indicative of a broader trend or large-scale layoffs within our organization.”

“While there have been individual cases of separation due to performance or strategic business restructuring, these have not been indicative of a broader trend or large-scale layoffs within our organization.”–Amanda Broos, Neo Financial vice-president

Neo’s severance packages meet or exceed all applicable legislative requirements, and operating business hours follow the law, Broos wrote.

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

Neo’s culture includes “open, honest dialogues, consistent feedback, and the flexibility to pivot and shift alongside the quickly evolving landscape of our sector,” Broos stated.

When asked what percentage of employees at Neo are new immigrants, Broos said the Winnipeg technology team has nine people who moved to Canada within the past three years. Roughly 10 per cent of the technology workforce are new or recent graduates, she added.

Kelly Fournel, chief executive of Tech Manitoba, hadn’t heard of layoffs at Neo Financial. Instead, the company always seems to be growing and hiring, she said.

“From what we’ve heard from leadership, things are going really, really well, and growth is a part of their road map for the foreseeable future,” Fournel said. “They generate the fantastic jobs that… build the tax base that we need here in Manitoba.”

Neo Financial became a Tech Manitoba member in 2021. The company sponsors Tech Thursdays, a weekly meet-up for industry players. It’s “huge” for the sector, Fournel said.

gabrielle.piche@winnipegfreepress.com