Human Resources Startup Zenefits Is Laying Off Almost Half Its Employees (buzzfeed.com)

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Human Resources Startup Zenefits Is Laying Off Almost Half Its Employees (buzzfeed.com)

Posted by ryuzaki0 on Thursday February 9, 2017 @05:20AM from the cutting-jobs dept.

An anonymous reader shares a report: Zenefits will lay off 45% of its employees in an effort to slash costs, according to an internal memo this morning that was obtained by BuzzFeed News, a stark acknowledgment by the embattled human resources startup that its onetime expectations for growth were vastly inflated. Roughly 430 workers will be cut, including 250 in Zenefits' San Francisco headquarters and 150 in its office in Tempe, Arizona, leaving the company with about 500 employees, according to the memo and a person briefed on the matter. That's about a third of the size it was a year ago, when it ousted its founding CEO, Parker Conrad, over revelations that it flouted state regulations for selling health insurance. Thursday's announcement, coming on the morning after the one-year anniversary of Conrad's departure, is the third round of layoffs -- and the largest -- to hit the company since the crisis began.

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Poetic Justice by Anonymous Coward · 2017-02-09 05:27 · Score: 5, Insightful

When it comes time to shed employees, corporate HR usually has a mysteriously low (if not the lowest) termination rate, despite being overloaded with redundant workers that have very little to do with the actual production of things. I think their self-entitled protectionism is only second to CEOs and politicians who can vote for their own pay raises.
Kind of sucks to be the #1 target of your own collusive practice, doesn't it?
1. Re:Poetic Justice by xxxJonBoyxxx · 2017-02-09 05:34 · Score: 2
  
  >> corporate HR usually has a mysteriously low (if not the lowest) termination rate, despite being overloaded with redundant workers
  
  Firing workers is a lot of work for HR. There's payouts, COBRA, threats of lawsuits, job placement workshops, etc. It's actually a busy time for them.
2. Re:Poetic Justice by __aaclcg7560 · 2017-02-09 06:05 · Score: 1
  
  There's payouts, COBRA, threats of lawsuits, job placement workshops, etc. It's actually a busy time for them.
  When I got laid off from my job in early 2009, I expected to transfer to a different contract. When I went into headquarters, the HR paperwork said I was being separated from the company. When I pointed this out to the HR person, she started hemming and hawing. When I asked about all the contracts that the company picked up and announced in the previous six months, she admitted that those contracts got cancelled and the company was facing a financial crunch from spending $500K on moving into a new building. HR was worried about being laid off as well. I spent the next two years out of work, underemployed for six months (working 20 hours per month), and filed for chapter seven bankruptcy. That company never rehired me for another contract, which was strange as I have worked for other contracting agencies multiple times.
3. Re: Poetic Justice by DaMattster · 2017-02-09 06:14 · Score: 1
  
  The human resources department is always the first out of the for and headed to the bar for happy hour.
4. Re:Poetic Justice by __aaclcg7560 · 2017-02-09 06:33 · Score: 1
  
  Lunch break is over!
  What's that?
  
  Get back to earning your pittance, wage slave!
  Tell me about it. I work in government IT and get paid significantly less than my private sector counterparts. OTOH, I get a month of time off each year and my contracting agency gave me an extra month of pay as a Christmas bonus last year. Sweet!
5. Re:Poetic Justice by hambone142 · 2017-02-09 09:46 · Score: 1
  
  Actually, I saw the opposite with our HR department. This is a large (very large) computer company. We don't even *have* a HR department on site for over 3,000 employees.
  Most of the HR functions were foisted upon management and the HR department is almost nonexistent.
  At one time, they had a fully staffed office. It's used for storage now.
  A lot of the tasks were either outsourced or moved down to Costa Rica for cheap labor.
6. Re: Poetic Justice by __aaclcg7560 · 2017-02-09 10:19 · Score: 1
  
  You are actually private sector, and as such your compensation is much better than a government employee.
  Maybe, maybe not. Some of my fellow government employees are driving Tesla cars. Then again, the Tesla dealership is just around the corner from us.
7. Re: Poetic Justice by luis_a_espinal · 2017-02-09 23:15 · Score: 1
  
  So that's what HR for, to fire people. I was wrong about it all this time.
  Why do stupid indo-chimps do all the headhunting? Isn't it racist and discriminating?
  HR doesn't fire people. They do not make the decision. Management from all the way up down to team leads, they decide who gets canned.
  The degree of power and frequency each layer of management exercises the task of firing, that's for another debate. HR is the one in charged of cleaning up the mess, in addition to manage paperwork, benefits, severance packages, and at times, counseling.
  This mindless hate for HR, me no get it.
I found their problem by Actually,+I+do+RTFA · 2017-02-09 05:29 · Score: 3, Insightful

it ousted its founding CEO, Parker Conrad, over revelations that it flouted state regulations for selling health insurance.
In today's world, you don't sack the CEO for flouting regulations. You do it brazenly, and then complain that regulations are hurting your business model (See, Uber, AirBnB).

--
Your ad here. Ask me how!
1. Re:I found their problem by interkin3tic · 2017-02-09 08:25 · Score: 1
  
  The real pros though make sure one or two other people do it even worse, so when those idividuals are burned at the stake* everyone goes back to thinking everything is just fine. Call it the "Martin Shrekelli" effect.
  
  (* and by "burned at the stake" I of course mean there are a lot of angry social media posts for a week or two before they go back to consequence-free living with the millions they still made.)
2. Re:I found their problem by Puls4r · 2017-02-09 09:40 · Score: 1
  
  There's a reason for that. Large companies are incredibly good at putting startups out of business. The barriers to entry into just about any business are incredible nowdays, between the competition and the regulation.... and the regulation that's been written BY the competition. Uber and Lyft are a perfect example of businesses that are 'illegal' in many places because of regulation put in place by lobbyists and local monopolies. Sort of like what the Cable and Telephone companies do.
3. Re:I found their problem by mjwx · 2017-02-10 00:38 · Score: 1
  
  it ousted its founding CEO, Parker Conrad, over revelations that it flouted state regulations for selling health insurance.
  In today's world, you don't sack the CEO for flouting regulations. You do it brazenly, and then complain that regulations are hurting your business model (See, Uber, AirBnB).
  Ironically enough, this is the fate Uber (and possibly AirBNB) have in store.
  
  Despite flaunting the rules, Uber is losing money hand over fist. Even in places where it's legal like the UK they aren't making any money.
  
  --
  Calling someone a "hater" only means you can not rationally rebut their argument.
Friends with Zenefits by Anonymous Coward · 2017-02-09 05:38 · Score: 2, Funny

wasn't what it was cracked up to be
1. Re:Friends with Zenefits by Motherfucking+Shit · 2017-02-09 08:03 · Score: 4, Informative
  
  All kidding aside, this is the company where being drunk on the job and having sex with coworkers on company property became such a problem, they had to send out an official memo telling their employees to stop getting drunk and fucking each other at work. At an HR company!
  
  --
  "BSD: Free as in speech. Linux: Free as in beer. Windows 10: Free as in herpes." --Man On Pink Corner in #52607549.
2. Re:Friends with Zenefits by tehcyder · 2017-02-10 03:44 · Score: 1
  
  All kidding aside, this is the company where being drunk on the job and having sex with coworkers on company property became such a problem, they had to send out an official memo telling their employees to stop getting drunk and fucking each other at work. At an HR company!
  Sounds like a clever bit of free advertising to me. I imagine job applications rocketed after the 'leak' of that memo.
  "So, Mr Jones, what do you feel you could bring to the zenefits table?"
  "Well, I'm certainly excited by the drunken-sex-in-a-stairwell opportunities."
  
  --
  To have a right to do a thing is not at all the same as to be right in doing it
Startup failure stories are more fun when by Spy+Handler · 2017-02-09 05:41 · Score: 1

cocaine, hookers and casinos are involved. And a chair throwing incident (or at least baguette throwing)
Yesterday's Fling story was way more interesting. This one is pretty much "meh".
Has anyone cleared this with HR? by jfdavis668 · 2017-02-09 05:41 · Score: 1

How is HR going to fire people, if you fire 1/2 of the HR people? They won't have time to process all that paperwork.
1. Re:Has anyone cleared this with HR? by Anonymous Coward · 2017-02-09 05:48 · Score: 1
  
  They will if they work unpaid overtime. Pulling together!
2. Re:Has anyone cleared this with HR? by Nidi62 · 2017-02-09 05:52 · Score: 1
  
  How is HR going to fire people, if you fire 1/2 of the HR people? They won't have time to process all that paperwork.
  Easy. 1st person gets fired. 2nd person processes 1st person's paperwork, then gets fired. 3rd person processes 2nd person's paperwork then gets fired as well. So on down the line. Problem solved.
  
  --
  The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
3. Re:Has anyone cleared this with HR? by TWX · 2017-02-09 05:58 · Score: 3, Funny
  
  How is HR going to fire people, if you fire 1/2 of the HR people? They won't have time to process all that paperwork.
  Simple. You outsource it to an third-party HR firm.
  
  --
  Do not look into laser with remaining eye.
4. Re:Has anyone cleared this with HR? by nospam007 · 2017-02-09 06:03 · Score: 1
  
  "How is HR going to fire people, if you fire 1/2 of the HR people?"
  Just as IT people have to train their Indian replacements, these HR people have to fire themselves.
5. Re:Has anyone cleared this with HR? by Anonymous Coward · 2017-02-09 06:04 · Score: 1
  
  How is HR going to fire people, if you fire 1/2 of the HR people? They won't have time to process all that paperwork.
  Easy. 1st person gets fired. 2nd person processes 1st person's paperwork, then gets fired. 3rd person processes 2nd person's paperwork then gets fired as well. So on down the line. Problem solved.
  I'd prefer an O(log n) algorithm.
6. Re:Has anyone cleared this with HR? by lq_x_pl · 2017-02-09 06:05 · Score: 2
  
  Like deconstructing a human linked list! This is amazing.
  
  --
  An internal system operation returned the error "The operation completed successfully.".
7. Re:Has anyone cleared this with HR? by g01d4 · 2017-02-09 06:21 · Score: 1
  
  Funny, but outsourcing their HR might not have been a bad idea, along the lines of a man who is his own lawyer...
8. Re:Has anyone cleared this with HR? by paiute · 2017-02-09 06:49 · Score: 1
  
  In 1925, Casey Stengal was playing for the Worcester Panthers. He was also general manager and a player. When he wanted to move to Toledo, he fired himself as manager, released himself as a player and resigned as president.
  
  --
  If Slashdot were chemistry it would look like this:Cadaverine
9. Re:Has anyone cleared this with HR? by Hognoxious · 2017-02-09 10:16 · Score: 1
  
  That doesn't make sense, at least in that order. Once he resigns as manager he has no authority to release himself as a player.
  
  --
  Confucius say, "Find worm in apple - bad. Find half a worm - worse."
10. Re:Has anyone cleared this with HR? by thegarbz · 2017-02-09 11:24 · Score: 1
  
  Okay okay, you win this round.
  Bonus question: How do you replace lawyers specialising in immigration with H1B workers?
11. Re:Has anyone cleared this with HR? by CanadianMacFan · 2017-02-10 15:25 · Score: 1
  
  From the group of possible people to be fired, everybody partners up with another employee and whoever has the lower employee id does the paperwork for the other employee who will be let go. If odd number of employees the person left out of pairing process keeps job. You can also have people with the higher employee id stay or have them flip a coin to mix things up.
  O(1) since it's a constant amount of time no matter how many many people get fired.
12. Re:Has anyone cleared this with HR? by paiute · 2017-02-11 18:09 · Score: 1
  
  He was the president of the club. Once he resigned as GM, the power over players reverted to the president.
  
  --
  If Slashdot were chemistry it would look like this:Cadaverine
Re:"Human Resources Startup"? by __aaclcg7560 · 2017-02-09 05:57 · Score: 3, Interesting

Small companies contract out their HR.
I work for a small contracting agency. They outsource everything online. Google Mail for email, Intuit QuickBooks for bookkeeping, and an HR provider for benefits and payroll. The 20 or so people at the NYC headquarters is to keep tabs on hundreds of contractors throughout the U.S. and maintain onsite records for government inspectors.
Re: "Human Resources Startup"? by dougdonovan · 2017-02-09 06:13 · Score: 1

my g/f is still a f/t employee @ the tempe location. yeah, she is looking.
Weird company... by Moridineas · 2017-02-09 06:21 · Score: 5, Insightful

I work at a small company (~30 employees) total that's been around for around 35 years. We don't have anyone dedicated to HR, it's just part of the jobs duties for one of the founders. About two years ago I heard bout Zenefits and went through a sales call with them.
The sales guy sounded like he was about 21 years old, didn't know anything, and was a total Bro.
Everything in the call was like "Ohh man, you're still doing it that way, bummer! That sucks man, check this out..."
"Yeah, what we're doing is rethinking HR from the ground up, and we're like Amazon disrupting all those legacy companies out there! We're so innovative you won't believe!!" (no, actually you're just fancy insurance brokers....)
"Yeah man, I hear you, , right man??"
It was an incredible turnoff.
I do think that HR, benefits management, payroll, etc., is totally ready for disruption and a good product, but Zenefits definitely is not it.
1. Re:Weird company... by interkin3tic · 2017-02-09 08:32 · Score: 1
  
  The sales guy sounded like he was about 21 years old, didn't know anything, and was a total Bro.
  For selling something as non-technical as HR services, isn't that kind of to be expected? Would kind of be silly to have a CPA or a PhD in economics calling small startups. On top of that, I'm guessing approximately every client they have is fellow 21 year oldish bros who don't really know anything, leading their own startup tech companies in silicon valley.
  
  The real question is why haven't all of us quit our jobs, gone to silicon valley, and launched startups that do something people have been doing for decades, but involving a mobile app with lots and lots of VC money.
  
  Here's a startup idea: a service that lets you hire 21 year old bros in silicon valley to pretend to be leading a company that you're already working in, call it a startup, and helps him find money from fellow bros in the valley.
2. Re:Weird company... by aaarrrgggh · 2017-02-09 08:57 · Score: 1
  
  ADP and some other large companies offer it. The main hurdles are Employer of Record issues (the employees stop being your employees), questions if they are working in your best interests (more CYA like a lawyer), or if the actions they perform are necessary and will ultimately help the company.
  
  We had an internal office manager with HR training that managed to screw a few things up, an outside HR consultant that fixed a few minor issues when we had a labor action, a labor lawyer, and the owners. It is best to just have someone on staff for day to day effort, and use the consultant for periodic audits and review of employee manual. Full compliance is too much work, although over 50 employees in one location you get stuck.
  
  I will say though, if you are starting your own company (with employees) from scratch, you should sit down with at least your payroll processing representative to make sure you have your basic policies correct (and understand when you are in grey areas). You don't want to screw up paychecks or PTO.
3. Re:Weird company... by radish · 2017-02-09 09:02 · Score: 1
  
  I have used Zenefits, it's fine. Certainly better than most of the in-house benefits systems that I've used at larger companies (from an employee point of view). Nice slick web site which lets you do pretty much everything you need in one place.
  
  --
  ---- Den ene knappen er powerknapp, den andre er Bender voice knapp "Bite My Shiny Metal Ass"
4. Re:Weird company... by tehcyder · 2017-02-10 03:50 · Score: 1
  
  No offence, but how or why the fuck would you want to disrupt payroll?
  You can mis-manage a company in every single way for years at a time, paying taxes late, exasperating suppliers and pissing off customers, but the first pay day when things go wrong and your staff aren't paid you're dead.
  
  --
  To have a right to do a thing is not at all the same as to be right in doing it
I guess it is time... by bobbied · 2017-02-09 06:23 · Score: 1

To fire all the people in HR and outsource that function..... It's worked for other companies!

--
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Re:"revelations that it flouted state regulations" by Desler · 2017-02-09 06:30 · Score: 1

How dare you make light of the Zenefits Massacre!
Re:"Human Resources Startup"? by Salgak1 · 2017-02-09 06:41 · Score: 1

WTF is that? Isn't "human resources" some department of big companies dealing with internal company drama? What would a dedicated company just for this do?!
I know that my employer uses a dedicated payroll company. I've worked for others that had everything but hire/fire outsourced to an external company. For really small outfits, or heavily virtualized ones, third party HR does make sense, especially if it's pay-as-you-go. HR law is apparently a minefield these days. . .
I miss FuckedCompany.com by bigdady92 · 2017-02-09 07:11 · Score: 4, Informative

That site was one of the best places to go for company meltdowns, layoffs, rumors of acquisitions, malfeasance, and other shenanigans. There's nothing like it nowadays.

--
Wheel of Time: Book by Book and Sumview (summary review) Bigdady92 style: http://bigdady92.blogspot.com/
Bad Name or Fraud?? by foxalopex · 2017-02-09 07:22 · Score: 1

I'm not sure if it's intentional but wouldn't "Zenefits" translate to "Zero Benefits"? to most folks? Why would anyone want to hire a company called that? Also I seem to recall when you start your company name with "Z" you often end up at the end of the phone book so there's potential that you're doing accounting fraud or something questionable so you want to be the last company folks call? Anyhow, wierd...
1. Re:Bad Name or Fraud?? by __aaclcg7560 · 2017-02-09 07:47 · Score: 1
  
  Your startup isn't a startup unless it has an unpronounceable and/or incomprehensible name.
2. Re:Bad Name or Fraud?? by cant_get_a_good_nick · 2017-02-09 14:13 · Score: 1
  
  Zen + Benefits. didn't you hear that anything Zen is cool? What is the sound of one pink slip dropping?
  Also, the googles means alphabetical order is less important than a single name that's unique. So we get zenefits.
3. Re:Bad Name or Fraud?? by mjwx · 2017-02-10 00:42 · Score: 1
  
  I'm not sure if it's intentional but wouldn't "Zenefits" translate to "Zero Benefits"? to most folks? Why would anyone want to hire a company called that? Also I seem to recall when you start your company name with "Z" you often end up at the end of the phone book so there's potential that you're doing accounting fraud or something questionable so you want to be the last company folks call? Anyhow, wierd...
  Actually to most people it would be a portmanteau of Zen and Benefits.
  
  Of course my experience with benefits/HR outsourcers is that they dont provide any benefits. Here, pay full list price for this outdated laptop... yep, fuck off, I'll go to Amazon. But we've got cheap gym memberships... yeah, 1 pound off at some craphole gym in Birmingham thats still more expensive than local gyms, what are savings.
  
  Also, no-one uses the phone book any more. It's all about your page rank (and even just showing up on Google).
  
  --
  Calling someone a "hater" only means you can not rationally rebut their argument.
Re:This is news for nerds or stuff that matters? by cant_get_a_good_nick · 2017-02-09 14:15 · Score: 1

WhatsApp had 55 employees when it sold for billions. Sizing a company by headcount is so last Century.
I say that last part with a bit of irony. I actually liked it when people actually, you know, made things, instead of piggybacking on free content from others.
Hiring discrimination made easy by Anonymous Coward · 2017-02-09 18:57 · Score: 1

I used them to do a bunch of the onboarding paperwork for new hires, like getting them set up with insurance, 401k, payroll, etc.
One feature they showed me was that I could estimate the cost of adding someone to our health insurance without actually doing it. Just plug in their age, gender, home zip code, and ta-da. When I asked what the use case was, they said it was for "Hypothetical situations. Definitely not for hiring decisions, but there's nothing to enforce that and we'd have no way of knowing if you did."
So of course, my boss got the hint and wound up using it to decide between two candidates who were equal in everything but age, "just to see." Went with the 31yo over the 45yo, but of course the insurance estimate didn't play into it, he swears...
Tempe, Arizona by dbIII · 2017-02-09 21:09 · Score: 1

Tempe, Arizona - awesome address for a HR company in my opinion :)