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Zenefits, the former US fintech highflier that was brought low by scandal last year, took another axe to its headcount on Thursday in the latest attempt to stabilise its business.
The San Francisco-based company said it was cutting 430 jobs in a rationalisation of its operations that would leave it with “enough cash to fund our operations for years to come.” The cuts will leave it with around 500 employees, a third the number when scandal hit a year ago.
By offering free human-resources software to companies in order to get a foot in the door and sell them healthcare and other insurance, Zenefits attracted a valuation of $4bn on its last fund-raising round in 2015. But founder and chief executive officer Parker Conrad was forced out after the company said he had helped employees falsify training records required by US state insurance regulators.
Zenefits sought to depict the latest cuts as an attempt to reduce its cost structure to a sustainable level. Business operations will be centralised in Arizona, with future additions to engineering and product teams planned for the lower cost cities of Vancouver and Bangalore.
Zenefits raised more than $580m in a rapid-fire series of investments rounds in the first two years after it was set up, making it one of the best-funded fintech startups. Its fall from grace was a black eye for one of Silicon Valley’s best-known venture capital firms, Andreessen Horowitz, which led the earliest investment rounds in the company.