Human resources and insurance software startup Zenefits has announced that 250 employees are being made redundant, representing 17 percent of the company’s workforce.
The news comes as Zenefits faces increasing scrutiny over the way it sells insurance policies to small businesses, with a recent BuzzFeed report indicating that more than 80 percent of its deals in Washington state were done by unlicensed brokers. This led to the company’s cofounder and CEO, Parker Conrad, stepping down to be replaced by COO David Sacks.
The layoffs have been confirmed in a statement issued to VentureBeat.
“Today, Zenefits is reducing our headcount by roughly 250 employees, or about 17 percent of total employees,” said Sacks. “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.”
The redundancies are the latest in a long line of layoffs across the startup realm. Earlier this month, event-ticketing startup YPlan revealed it was cutting 30 percent of its workforce, shortly after Autodesk announced it was losing 10 percent of its workforce, or 925 employees. Mixpanel also announced that it was getting rid of 20 employees — a move it explained by saying that it had “overhired.”