Zenefits Layoffs: Troubled HR Startup to Cut Nearly Half Its Staff

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A round of Zenefits layoffs has been announced due to the company hiring too many workers early in its history.

Zenefits Layoffs

The startup has around 930 workers, 430 of which will lose their jobs. Zenefits focuses on selling HR software and insurance to small businesses, and the company’s rapid growth was the stuff of legends in its Silicon Valley home.

The company sent a memo to its employees, noting that most of these job cuts — approximately 250 people — will take place in its San Francisco offices. Another 150 layoffs will happen in Zenefits’ Tempe, Arizona offices.

Part of the company’s impressive rise had to do with the fact that venture capitalists injected $582 million into it for its first two years. Its value boomed to an impressive $4.5 billion.

Much like many Silicon Valley startups, Zenefits suffered from overvaluation, which led to the company hiring up to 1,600 people at one point. Additionally, the company developed a hardcore party atmosphere that included drinking shots during the day and the like.

The new round of Zenefits layoffs will help the company even out from all the madness that encapsulated the company during its early days. It also didn’t help that the company missed its sales goals, and it found itself in legal trouble after selling software in some states without the proper licensing.

The startup will eventually hire more people in its engineering segments both in Vancouver, Canada and Bangalore, India.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/02/zenefits-layoffs/.

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