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BuzzFeed News, which has broken just about every story about Zenefits, has another today with the news that new CEO Jay Fulcher this morning announced the cuts to staff this morning. From the BuzzFeed article:
Zenefits will lay off 45% of its employees in an effort to slash costs, according to an internal memo this morning that was obtained by BuzzFeed News, a stark acknowledgment by the embattled human resources startup that its onetime expectations for growth were vastly inflated.
Roughly 430 workers will be cut, including 250 in Zenefits’ San Francisco headquarters and 150 in its office in Tempe, Arizona, leaving the company with about 500 employees, according to the memo and a person briefed on the matter. That’s about a third of the size it was a year ago, when it ousted its founding CEO, Parker Conrad, over revelations that it flouted state regulations for selling health insurance...
Zenefits, which is both a software maker and a health insurance broker, will turn to staffing agencies for seasonal workers during the fall and winter months, a busy period when customers are enrolling in benefits. In addition, after upgrades in its software, Zenefits has less need for workers to help with tasks like customer enrollment, the person briefed on the matter said...
Even in a town built on hype, Zenefits turned heads for its rapid ascent to elite “unicorn” status, gaining a $4.5 billion valuation just after its second birthday. Conrad, its leader at the time, said the company was on track to reach $100 million in annual recurring revenue by the end of 2015, and he aggressively staffed up in anticipation of that milestone.
But the reality fell short. By the middle of 2016, annual recurring revenue was around $60 million, and Zenefits had slashed its valuation to $2 billion. More detailed financial information obtained by BuzzFeed News showed that Zenefits lost $100 million in the six months from February through July 2016, on revenue of $35.3 million. During that period, the company burned through $97.1 million of cash, a rate that put it on track to run out of cash by the end of 2017.
More in the link below.
https://www.buzzfeed.com/williamalden/zenefits-is-laying-off-almost-half-its-employees?utm_term=.bsDLmkJL1#.ciMQyBzQw
Zenefits will lay off 45% of its employees in an effort to slash costs, according to an internal memo this morning that was obtained by BuzzFeed News, a stark acknowledgment by the embattled human resources startup that its onetime expectations for growth were vastly inflated.
Roughly 430 workers will be cut, including 250 in Zenefits’ San Francisco headquarters and 150 in its office in Tempe, Arizona, leaving the company with about 500 employees, according to the memo and a person briefed on the matter. That’s about a third of the size it was a year ago, when it ousted its founding CEO, Parker Conrad, over revelations that it flouted state regulations for selling health insurance...
Zenefits, which is both a software maker and a health insurance broker, will turn to staffing agencies for seasonal workers during the fall and winter months, a busy period when customers are enrolling in benefits. In addition, after upgrades in its software, Zenefits has less need for workers to help with tasks like customer enrollment, the person briefed on the matter said...
Even in a town built on hype, Zenefits turned heads for its rapid ascent to elite “unicorn” status, gaining a $4.5 billion valuation just after its second birthday. Conrad, its leader at the time, said the company was on track to reach $100 million in annual recurring revenue by the end of 2015, and he aggressively staffed up in anticipation of that milestone.
But the reality fell short. By the middle of 2016, annual recurring revenue was around $60 million, and Zenefits had slashed its valuation to $2 billion. More detailed financial information obtained by BuzzFeed News showed that Zenefits lost $100 million in the six months from February through July 2016, on revenue of $35.3 million. During that period, the company burned through $97.1 million of cash, a rate that put it on track to run out of cash by the end of 2017.
More in the link below.
https://www.buzzfeed.com/williamalden/zenefits-is-laying-off-almost-half-its-employees?utm_term=.bsDLmkJL1#.ciMQyBzQw
