Zenefits eliminating Tempe sales operation, cutting jobs, paying workers to quit

Posted at 4:32 PM, Jun 14, 2016
and last updated 2016-06-14 21:06:33-04
It's been one year to the month that Zenefits announced it was expanding into Tempe and bringing hundreds of new jobs by the end of 2015.  
Now, for the second time this year, Zenefits announced layoffs. A total of 250 employees were let go in February. Of those workers, 160 were from the Tempe office.
On Tuesday, a memo went out to all Zenefits employees regarding the elimination of another 106 jobs, which includes 80 jobs from the Tempe office, according to a company spokesperson.  The sales operation in Tempe will be eliminated.  As part of the changes, some current employees are also being offered buyouts.
Though the Arizona sales operation is being closed, the office itself, located in the Hayden Ferry complex, will remain open and 350 employees will continue working there in other departments.
All of Zenefits' sales operations will be streamlined into the San Francisco office. The move resulted in a reduction of 9 percent of the workforce.
In memo that went out to all employees Tuesday, CEO David Sacks said that the company will "provide generous support to our departing employees during this transition so we will offer 3 months of severance, 6 months of COBRA, and transition assistance."
The company has seen its share of trouble in recent months. Sacks became CEO after the previous CEO and founder Parker Conrad resigned following the revelation that the company allowed unlicensed salespeople to sell health insurance.
In February, The Wall Street Journal reported that a memo went out ceasing all alcohol drinking and sex in the office after cups and used condoms were found in the stairwell of its headquarters in San Francisco.
The memo that went out Tuesday from Sacks also offered two months severance pay and four months of COBRA to employees who no longer want to continue working for the company. Dubbed the "Offer," anyone who started working there before Feb. 8 is eligible. In a separate memo, new COO Abhijeet Dwivedi laid out a restructuring plan to cross-train more employees to become proficient in other jobs and streamline workers into five departments.
Zenefits is an online platform that automates human resources systems, payroll and benefits into one for businesses. Its customers receive free service and the company collects fees from benefit providers.