New Zenefits CEO David Sacks, the company's former COO who replaced co-founder and CEO Parker Conrad after his resignation following revelations of compliance issues, is attempting a turnaround. To perform that, Sacks claims he requires cutting 17 percent of his staff. That means 250 mostly sales representatives, reportedly hired in a frenzy last yea, are going to have to find a new place, other than company stairwells, to fornicate.
“We are letting go of many great people today, and it is not their fault,” said Sacks in a memo obtained by Buzzfeed's Will Alden, who has dogged the company with persistent reporting. “It is no secret that Zenefits grew too fast, stretching both our culture and our controls. "
Offering free human resources software to small businesses, Zenefits collects commissions once it sells health insurance to them. Internally, the company's culture has also come under attack as a symbol of Silicon Valley profligacy.
“When I became CEO of Zenefits, I promised on Day 1 to reset our culture, refocus our strategy on serving small businesses, and create a new beginning for success in the future,” Sacks wrote according to Techcrunch. “Today I have to make a very difficult set of decisions about how we do that. In fact, this is the most difficult decision I’ve had to make in my career, but it is necessary for Zenefits to move forward successfully.”
According to Fortune, he continued that, "Today, Zenefits is reducing our headcount by roughly 250 employees, or about 17 percent of total employees. These changes are almost entirely in the Sales organization, with about a dozen employees in Recruiting. This reduction enables us to refocus our strategy, rebuild in line with our new company values, and grow in a controlled way that will be strategic for our business and beneficial for our customers."
Zenefits recieved $500 million in funds from major investors last year at a valuation of $4.5 billion.
Previously: Zenefits Tells Employees To Stop F**king At Work