
Zenefits confirms 250 layoffs, 17% of company workforce - stygiansonic
http://venturebeat.com/2016/02/26/zenefits-confirms-250-layoffs-17-of-company-workforce/
======
braythwayt

      > Human resources and insurance software startup Zenefits
      > has announced that 250 employees are being made redundant,
      > representing 17 percent of the company’s workforce.
    

Before "being made redundant' became empty buzzspeak, it had a very specific
meaning: When things are restructured in such a way that two people end up
doing the same job, one becomes redundant. For example, if you have an in-
house recruiting team, and you become aqui-hired by BigCo, they may decide
that all recruiting will be handled by their existing team, and your
recruiting team becomes redundant.

Notice that the job to be done is still there, it's just that the company has
more people doing it than necessary.

But in this case, the company is laying off a lot of its sales force and
recruiting team while mumbling further content-free buzzwords about refocusing
its strategy. Meaning, they aren't growing any more, so they won't be selling
as much or recruiting as much.

The job to be done is no longer there. Therefore, those aren't redundancies,
those are layoffs, pure and simple.

The distinction is important, because "redundancies" can arise as you grow
(e.g. acquiring), but "layoffs" imply that the engine is sputtering.
Eliminating redundancies is a matter of optimization. Laying people off is a
matter of scaling back your ambitions.

The company is obviously trying to spin this, and VentureBeat is regurgitating
their press release word-for-word without any editorial oversight whatsoever.

~~~
dragonwriter
I think "made redundant" has been the _British_ term for laid off for quite a
while; though this is, IME, far less common in American usage. I think the
distinction you are positing between them could be a good one to make, but I
don't think its one that has ever been consistently applied in general usage
of the terms in reference to business.

> In this case, the company is laying off a lot of its sales force and
> recruiting team while mumbling further content-free buzzwords about
> refocusing its strategy. Meaning, they aren't growing any more, so they
> won't be selling as much or recruiting as much.

Given that affected parts of the company are those most directly implicated in
the regulatory violations that have produced the immediate problems, I wonder
if there isn't another level of spin here, and whether this isn't more a set
of firings to purge the problem units than a layoff.

~~~
jen20
Normally in British English the phrase "made redundant" implies there is a
payment made to the departing employees, normally of several months salary.
The phrases "sacked", "fired" and "let go" do not imply that. It is unclear
which applies from the article - it sounds like lay-offs in prose, but the
words "made redundant" muddy this.

~~~
dragonwriter
> Normally in British English the phrase "made redundant" implies there is a
> payment made to the departing employees, normally of several months salary.
> The phrases "sacked", "fired" and "let go" do not imply that.

The same is generally true in American English, with "laid off" replacing
"made redundant" and "sacked" being uncommon for the other alternative (but
"fired" and "let go" being quite common.)

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tarr11
We are using zenefits and gusto right now.

Gusto is pushing to switch for benefits management, but it's a bunch of work.

I feel a little gross about staying with zenefits after hearing about their
company, but it's mostly free and seems to work.

They are also offering some other services like 401k, shift management and
stock options planning.

I'm sure at some point I'll consolidate on one of these platforms, but right
now they don't seem stable.

~~~
taway_20160226
I don't know if I am alone in this but I have had job offers where the
deciding factor on yes/no from my perspective was whether the company uses
Zenefits.

Everyone I have spoken to on the subject has at least one horror story, and
this was prior to the recent revelations. Add that to the general behavor of
the company and the employees. Although the CEO "took the fall" for it, it
simply cannot be the case that everyone else is blameless - the culture there
is rotten to the core. Andreesen Horowitz, and Lars Dalgaard in particular
should shoulder much of the blame for encouraging business practices which are
shady at best and downright illegal in all probability.

~~~
rconti
Meanwhile, ADP is an absolute joy to use. _clicks 80 times to add 8 hours of
PTO for each day of the 10 days I 'll be on vacation_

Nevermind, I can't actually do that because my account NEVER FUCKING WORKS.
Between portal and ipay, the passwords at least used to be shared, even though
you had to reset it literally every time you use the site. Now they're not
even shared, you need to contact your HR department to get it reset, and even
once you DO set a new password, it doesn't work.

Talk about a dumpster fire of a company.

Other than the website, I don't get why a normal employee would care about the
difference between providers. What does one do with Zenefits that's so
painful? Literally all I ever want to do is see pay statements and enter PTO.
ADP's Oracle Forms implementation is a special circle of hell, so I don't
really see how it could be worse.

~~~
x0x0
well, I'm 7 emails and 4 phone calls (on two of which those assholes hung up
on me) deep into trying to get zenefits to approve a commuter parking
reimbursement, including having to send screenshots of the submitted claim _in
their system_ to one of their employees because he couldn't see it. And I
still don't have my money.

Also, apparently I was rude to the supervisor I spoke with two days ago. Yet
somehow their behavior -- wasting my time and repeatedly hanging up on me
while on hold -- is totally cool.

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kylestlb
Layoffs are never fun... sad :(

For the more biz-minded commenters out there: does laying off sales +
recruiting signal a specific scenario (other than the obvious recent legal
woes)? Rather than laying off engineers?

~~~
trjordan
Zenefits is a classic enterprise sale, meaning you staff the sales team at: #
of reps X average quota = expected sales.

The recent problems will hit their sales hard, and leadership knows it. With
the growth they've had, there's a chunk of their sales team that's not fully
ramped (meaning not producing revenue). Laying off reps + recruiting says they
think they can't grow as fast as they previously could.

Not laying off engineers is probably more about how hard it is to hire
engineers today, and knowing that when they get past these problems, it'll be
easier to re-hire reps than re-hire engineers.

~~~
w1ntermute
Why exactly is it so hard to hire engineers as opposed to sales people? Isn't
it just as hard to find a 10x sales person as a 10x engineer?

~~~
braythwayt
Without commenting on the possibility that 10x engineers exist, I can tell you
from experience in sales that 10x salespeople are extraordinarily easy to
identify, but nearly impossible to hire.

The problem is that the market for salespeople is very efficient. So your 10x
salesperson is nearly always already earning an outstanding amount of money
working for an excellent company. They are already selling a product with a
demonstrable value-add, and they are employed by a company with a good
reputation.

Why would they want to come and work for a start-up that stumbled and then at
some future date tried to turn itself around?

~~~
w1ntermute
> 10x salespeople are extraordinarily easy to identify, but nearly impossible
> to hire

Doesn't that just mean you need to offer a higher percent commission, more
equity, or whatever it takes to sweeten the deal?

~~~
braythwayt
Well, now you're into a different problem: If the market is efficient, what
makes you think you can _afford_ to pay them that much?

Your equity isn't magically worth more than the equity of the company that
already employs them. And if you give them a tremendous chunk of every sale
they make, your COS is through the roof and you aren't making any money.

You might go raise a ton of cash and spend it buying great salespeople so you
can buy some MRR and ARR, but everyone else is playing the exact same game, so
you don't automatically raise more money than anyone else to spend on better
salespeople.

In the end, what I am saying is that there is an efficiency in that market for
salespeople such that anything you might think of doing to bring them on
board, their existing employer has already done. And possibly better than you
ever could.

~~~
w1ntermute
Presumably, you're targeting an opportunity that is very lucrative with a
product that is very compelling, such that a sales person can generate more
value per unit effort than at their current position.

Or perhaps the issue is that, in sales, there isn't the same multiplier
phenomenon you see in engineering from massive scale/market opportunity. And
this nonlinear effort-to-output relationship is what enables the market
inefficiencies (sometimes in favor of companies, and sometimes in favor of
engineering employees).

~~~
TheCoelacanth
Presumably, so is anyone else who can afford to hire a 10x salesperson.

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justinzollars
Sad news. Sorry if you were affected by this.

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stygiansonic
From the CEO: " _These changes are almost entirely in the Sales organization,
with about a dozen employees in Recruiting._ "

~~~
w1ntermute
I wonder how many of them were thrown under the bus for cheating on the
insurance broker licensing exam using Conrad's script.

~~~
JonFish85
In that case, I wonder if they'd have any luck with suing him, or if the onus
is entirely on them for having used it? Not being a lawyer, I'd imagine this
would be a civil case where they'd go after his money / stock.

~~~
FireBeyond
Doubtful. Even if they could claim they were 'pressured' into doing so, there
was no real coercion - they made the choice to not go through the process.

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jtouri
This is too bad, I feel sorry for the company in a way. This was a company I
kept up with because it was fun seeing their growth. I didn't see the negative
side of the culture until after Conrad stepped down and all hell broke loose.

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timrpeterson
How does a company, especially a nascent one like Zeenfits, survive in a space
when they've suffered this type of hit? An industry all about trust and
conservatism and a company playing fast and loose with the rules? Can it work
out?

~~~
tallanvor
They could survive. My guess is they'll basically focus on retaining as many
current customers as possible, get through any investigations about their
practices, and hope that once those are finished people will mostly have
forgotten about what happened and be willing to give them a chance if their
product is on par with others out there.

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brightball
I wonder if that has anything to do with the success of Benefit Focus?

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erichurkman
If any of the layoffs were in the engineering groups, drop me a line.

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eldavido
It irritates me that engineers never get laid off.

This means companies still view their engineering workforces as "scarce" and
hard to get, because they aren't paying market wages. Why is it only sales
that gets the ax?

~~~
dragonwriter
The license requirement cheating (in one jurisdiction) and outright selling
without a license (in other jurisdictions) were problems occurring in Sales
(which may implicate some problems in Recruiting, as well.)

I don't recall any of their problems being traced to engineering. So, while
these are for PR purposes styled as redundancies, I think its at least worth
considering that it may be more of a purge of the problem parts of the
company.

