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.

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.


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.



  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. Required fields are marked *


American Genius
news neatly in your inbox

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



Business News

The tech industry is hurting right now, with layoffs spanning several companies. Salesforce is up next, with 10% of employees being laid off.

Business News

Companies left and right are taking part in the layoff movement as we enter 2023. How does your company stack up against the rest?

Social Media

As if things couldn't get more twisted at Twitter, they are holding a legitimate auction to get rid of HQ items in 2023.

Business News

The massive layoffs spanning the tech industry have far and wide effects, including diminishing the US's top visa talent.

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.