San Francisco based Billion-dollar Human-resources software company Zenefits, praised as one of Silicon Valley’s most promising startups less than a year ago, laid off 250 employees on Friday. According to the press release, the company, which helps businesses manage their HR from payroll to benefits, said the dismissal of about 17 per cent of its current workforce was concentrated in sales.
The cuts come on the heels of the startup announcing last week that it was banning staff from drinking in the office after some reports of wild parties within the office premises and a series of instances involving crude behavior.
This latest move comes in line behind some recent changes within the startup including the abrupt resignation of its founder Conrad Parker earlier this month.
Zenefits, which launched less than three years ago but was evaluated last May at $4.5 billion, is also being investigated by California regulators to determine if the company helped some of its agents illegally obtain their insurance licenses.
Last year it was reported Zenefits, which has raised more than $580 million in venture funding, was falling short of its $100 million annual revenue growth target and had held off from hiring in certain areas while it cut employee salaries in others.
David Sack, the new CEO said in a staff memo that was sent around last Wednesday that it is important to cultivate a more mature work atmosphere.The memo acknowledged how ‘it is too difficult to define and parse what is ‘appropriate’ versus ‘inappropriate’ drinking in the office’. Some reports said that sales staff would gather together and do a shot when a new client was signed.