UPGRADE 1-Zenefits to lay off 106 workers, pay others to give up

(Adds sourcing, details from memo and context of Zenefits’
struggles) By Heather Somerville Zenefits, a personnels software
start-up that has actually been beleaguered by compliance issues, is
laying off more than 100 staff members, as financiers indicate the
business as a cautionary tale for startups that attempt to grow too
quickly. San Francisco-based Zenefits will lay off 106 people, or
about 9 percent of the personnel, according to an internal memo by
Ceo David Sacks seen by Reuters. The business’s Arizona sales operation will be closed and
a number of the staff laid off. In addition to the layoffs, Sacks is offering workers who
willingly quit 2 months of severance and 4 months of
healthcare benefits.

Zenefits provides software application for businesses to automate
aspects of their personnels services, including health
care, stock choices and holiday time. It provides software application for
totally free and makes money serving as a health insurance broker,
working as the intermediary in between companies and companies such
as Anthem Blue Cross, and charging a broker cost. Zenefits co-founder and former CEO Parker Conrad resigned in
February amid discoveries that the company had actually flouted insurance
regulations.

Some Zenefits personnel who offered insurance coverage did not have the
proper licenses to do so. Regulators in Washington state and
California have launched examinations into the company’s.
practices. In his memo, Sacks, who joined Zenefits more than a year back.
as primary running officer, said the company had actually fixed lots of.
of its problems, including its “licensing concerns.” He likewise detailed a “total redesign of Zenefits,” including.
changing how the company is organized, how it works with.
customers and his expectations of staff members.

BuzzFeed News first reported the layoffs on Tuesday and was.
first to report the compliance chaos at Zenefits. The business also cut 250 tasks in February. Financiers as soon as touted Zenefits as the fastest growing.
software application start-up in Silicon Valley history. Today, some endeavor.
capitalists point to the business as a cautionary tale of.
startups who raise excessive cash and try to grow too quickly. Considering that releasing in early 2013, Zenefits has raised more than.
$ 500 million from investors, including two rounds of funding.
from venture company Andreessen Horowitz within four months. In May.
2015, it had a $4.5 billion assessment.

( Reporting by Heather Somerville in San Francisco; Editing by.
Cynthia Osterman).

Read More

Leave a Reply

Your email address will not be published. Required fields are marked *