The worst week in SoFi‘s history is coming to an end. The company announced today that Mike Cagney has stepped down as CEO effective immediately. This follows the news on Monday that Cagney would be stepping down as CEO by the end of the year. But the bad news this week kept escalating and the board decided it needed to take action now.
The interim CEO will be current their new Executive Chairman Tom Hutton. The company also said they will be accelerating the search for a new permanent CEO. Here is a quote from their interim CEO in the company’s official statement circulated this morning:
SoFi’s management and employees have built a remarkable company, and I look forward to helping the company continue to grow. The business is strong, stable and well-positioned. For now, there is no more important work than paving the way for future success by building a transparent, respectful and accountable culture.
This marks a truly stunning fall for Mike Cagney. I have said many times that I considered him to be one of the smartest people in all of fintech and I have been truly impressed with SoFi as a company. Despite all the troubles there they have done some pretty amazing things and there was a reason why they were considered by many to be the leading fintech company in the US.
But clearly there has been trouble at the company for some time. If even half of the stories reported this week are true the company’s culture was so toxic that it now seems inevitable that a downfall would happen eventually.
SoFi has a huge amount of work to do now to repair the damage that has been reported on this past week. The stories of malpractice in so many areas of the company paints a picture of a dysfunctional organization that needs to be rebuilt from the ground up. As Hutton said the most important work will be “paving the way for future success by building a transparent, respectful and accountable culture.”
It is going to fascinating to watch the once high flying company rebuild. They certainly need to clean house so I expect many managers will be shown the door. Other companies have come back from difficult challenges but it will not be easy. They have a strong balance sheet but attracting and keeping good people will likely be their biggest challenge in the short term. One thing is for sure by this time next year SoFi will be a very different company.