Zenefits Cutting 9 Percent of Its Workforce

By: Daniel Steingold | June 14, 2016

Zenefits, a large, private HR solutions firm, has announced that they are eliminating 106 individuals from their workforce.

The cuts, which affect about nine percent of the total base of employees at Zenefits, will impact many of those who work for the company in Arizona. The Arizona district, which largely focuses upon sales and marketing efforts, will see these departments relocate to San Francisco.

The Arizona office was later clarified to not be completely shuttered, as over 350 employees will remain working on its premises.

Zenefits CEO David Sacks called the news β€œa painful decision,” and he is behind the decision to provide severance packages to those affected. These packages will consist of two months pay and four months of continued healthcare coverage, with the caveat being that the offer must be accepted by noon this Thursday.

Sacks, who became CEO this past February, has been credited with implementing a better company culture at Zenefits compared to his predecessor, Parker Conrad, who was forced to resign. Soon after gaining his post, Sacks let go of 250 employees.

COO Abhijeet Dwivedi emphasized in a separate email to employees how Zenefits needed to be leaner and more streamlined. He called the changes a way β€œto amplify what we do well, and obliterate our deficiencies.”

In recent months, Zenefits has run into a number of issues beyond the loss of their CEO, including compliance with state insurance laws.

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