Troubled Zenefits cuts 17% of workers to 'refocus'
Companies have seen better times than much-troubled HR startup Zenefits has in the last month. Now, add layoffs for 17 percent of the company's workforce – about 250 employees – to the litany of bad news, according to Fortune. The layoffs follow the departure of founder and former CEO Parker Conrad in disgrace and the discovery that the company had employed a macro to dupe a required online regulatory course.
As a general rule, layoffs are usually the last thing any unicorn startup wants to see, though it follows from new CEO David Sacks' pledge to clean up the culture and business at the company. It seems most of the layoffs come from the company's sales team, which has been the source of the company's consternation. In addition, about a dozen employees from recruiting will leave.
Reforming Zenefits has been Sacks' goal since he took over following Conrad's departure. Each public move he's made has sought to rein in what he said was a culture that did not jive with the highly regulated health insurance market.
"For us, compliance is like oxygen. Without it, we die," read Sacks's blog post to employees earlier in February after taking over.
In his email to employees announcing the layoffs, acquired by Fortune, Sacks said it was no fault of the employees that they were let go.
"It is no secret that Zenefits grew too fast, stretching both our culture and our controls. This reduction enables us to refocus our strategy, rebuild in line with our new company values, and grow in a controlled way that will be strategic for our business and beneficial for our customers," he wrote.
Sacks has also made drastic culture changes to the company – including banning alcohol consumption on the job – in an effort to crack down on the notion that the company valued at $4.5 billion was closer to a frat-style bootstrapping startup than the major HR player it aims to be.
- read the article from Fortune
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