Dive Brief:
- Zenefits, under fire this month from compliance errors, announced it will begin to lay off about 250 employees on Friday, largely in the sales and recruiting sectors, Fortune reported. That number is about 17% of its current workforce.
- The tech startup, which offers a software-as-a-service HR tech solution to small-to-medium sized businesses and sells health insurance, is alleged to have allowed essentially unlicensed brokers to sell insurance.
- Cutting those jobs is the latest move by by David Sacks, who replaced Parker Conrad as CEO this month. He has also reportedly banned alcohol at the company, Fortune reported.
Dive Insight:
Zenefits, most recently valued at around $4.5 billion, has garnered intense media attention this past month thanks to the compliance problems and exposure of the company's work culture – most notably that leaders had to ask employees not to have sex in the stairwells at work.
"It is no secret that Zenefits grew too fast, stretching both our culture and our controls," Sacks said in an email to the company. "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."
Culture and compliance may seem disparate to growth – but ignore one, and all three will suffer, experts told HR Dive this week.
