Zenefits, the health insurance brokerage startup that once chastised workers for engaging in stairwell sex, is laying off 250 employees—about 17% of the company's workforce, according to TechCrunch. In a company-wide email disclosing the news, CEO David Sacks said the majority of cuts would come from the sales team, citing growth that was "too fast, stretching both our culture and our controls" as an explanation for the layoffs.
"This reduction enables us to refocus our strategy, rebuild in line with our new company values, and grow in a controlled way that will be strategic for our business and beneficial for our customers," Sacks wrote. Sacks was promoted from COO to CEO just a few weeks ago, when founder and former CEO Parker Conrad stepped down amid reports that Zenefits sales representatives had assumed the roles of insurance brokers without the qualifications to do so.
When Sacks took on the position, he told employees that he intended to right the ship following the allegations—a plan that he reiterated as he announced the layoffs. "When I became CEO of Zenefits, I promised on Day 1 to reset our culture, refocus our strategy on serving small businesses, and create a new beginning for success in the future," Sacks wrote.
Zenefits is currently under investigation in both California and Washington for potential regulatory violations.