Zenefits is laying off almost half of its workforce. The company is laying off around 430 employees — or around 45 percent of its total employee strength. Of these, 250 departures will come from the company’s main, San Francisco HQ while the rest of the desks will be cleared out at its Tempe, Arizona premises.
This marks the third round of layoffs from the company under as many CEOs. Zenefits, which offers an online, cloud based HR software, had announced Jay Fulcher as its new CEO, earlier this week.
Speaking with TechCrunch, a Zenefits spokesperson said:
[the layoffs] 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 the operations of the company more efficient.
In wake of these layoffs, the company is looking to centralize its operations group in Arizona. It will also attempt to nurture and grow its various product and engineering teams in Vancouver and Bangalore. The company hopes that following these layoffs, it will be able to have enough cash to fund operations for the near future.
Speaking on the topic, the new Chief Executive Jay Fulcher said:
today’s action aligns our costs more closely to our business realities and gives us the runway we need to build the business properly for the long term
Looking back, 2016 wasn’t a particularly great year for Zenefits. The company was fined $7 million in California and went through multiple rounds of downsizing after first having raised large amounts of money at huge valuations.
Meanwhile, the news is interesting in several other respects as well. The company has President Trump’s close ally Peter Thiel as its board member. As such, the move to expand teams in Canada and India while cutting jobs in the US certainly seems a bit strange and runs somewhat contrary to what you would have expected. A company spokesperson however, later claimed that the move wasn’t a ‘fire in US and hire elsewhere’ exercise.
