Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

Easy lessons from Zenefits’ dumpster fire of layoffs

(BUSINESS NEWS) New CEO Fulcher said that, “This isn’t how any CEO would choose to spend his first week on the job. But I strongly believe these difficult decisions are essential in setting Zenefits up for success.”

fired by text

A quickly declining value

Once the darling of Silicon Valley, software company Zenefits is quickly losing its status as the “unicorn” of the startup world.

bar
Zenefits impressed us at first, drumming up millions of dollars in investments in just two years and quickly growing to become a billion dollar company. In 2015 the company, which makes software for small businesses to manage human resources functions like payroll and health insurance, was valued at $4.5 billion, but that number dropped to $2 billion the following year.

Growing pains and more

Most experts diagnose Zenefits’ failure as a textbook case of too much growth too soon. There were also concerns that the company was skirting laws regulating who can and can’t sell insurance. CEO and co-founder Parker Conrad resigned amidst these rumors, leaving his positon to David Sacks, who laid off over 300 employees and famously e-mailed his staff admonishing them not to drink alcohol or have sex in the company stairwells.

[clickToTweet tweet=”Sacks was replaced by Fulcher, who spent his first week laying off almost half of Zenefits’ staff.” quote=”Just three days ago, Sacks was replaced by Jay Fulcher, who spent his first week on the job laying off almost half of Zenefits’ staff.”]

In an email to 430 employees, 250 of whom work in San Francisco and another 150 in Arizona, Fulcher said that, “This isn’t how any C.E.O. would choose to spend his first week on the job. But I strongly believe these difficult decisions are essential in setting Zenefits up for success.”

Advertisement. Scroll to continue reading.

Layoffs long in the works

Another Zenefits spokesperson explained that the layoffs had been in the works before Fulcher took over. “This has been planned for some time and is the result of a lot of hard work over the past year to improve our products and service and make operations of the company more efficient,” they explained.

Meanwhile, the company is expanding their engineering and product divisions in Vancouver and Bangalore.

“Today we took a hard but necessary decision,” said the spokesperson.

Just 500 employees remain on Zenefits’ payroll.

#Zenefits

Advertisement. Scroll to continue reading.

Ellen Vessels, a Staff Writer at The American Genius, is respected for their wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when not writing, and has a passion for sustainability, social justice, and the arts.

2 Comments

2 Comments

  1. Pingback: What we can learn from Cracker Barrel and Brad's wife - The American Genius

  2. Pingback: Zenefits competitor has thrown the gauntlet - The American Genius

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business News

With strict competition and anti-trust allegations, Google is slipping down the path of layoffs and company cuts.

Social Media

Snap will lay off 20% of its workforce, which is over 1,000 employees due to missed revenue and earnings in the second quarter.

Opinion Editorials

Startups are perpetually viewed as the quintessential millennial paradise with all of the accompanying perks: Flexible hours, in-house table tennis, and long holidays. With...

Business Entrepreneur

Whether you're a small business or startup, improving productivity means more money and less stress. Here are five tools to help do just that!

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.