Bench, the accounting and tax startup that was purchased in a hearth sale final December, has performed a spherical of serious layoffs, it confirmed to TechCrunch.
Bench didn’t specify how many individuals have been affected, however one one that works there estimated that Bench was eliminating dozens of positions – that’s an enormous chunk of the round 300 individuals who work for the corporate.
Departments like shopper success and tax providers have been instantly impacted, with one particular person instantly conversant in the matter telling TechCrunch that the majority of Bench’s U.S.-based tax advisory workforce was eradicated.
Employer.com, the San Francisco HR tech firm that purchased Bench final yr, instructed TechCrunch the choice to make the cuts “was not made evenly.”
“We deeply recognize the contributions of our workers who’ve labored diligently to keep up these accounts,” Employer.com CMO Matt Charney mentioned.
Below earlier possession, Bench raised over $110 million in VC funding and over $50 million in debt, however by no means reached profitability. The corporate burned via its money and abruptly shut down, shedding its complete workers and leaving hundreds of consumers with out entry to their books. Employer.com then swooped in, shopping for Bench for $9 million, re-hiring many of the startup’s workforce, and pledging to revive the startup.
The transfer saved Bench from whole collapse.
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However two present Bench employees and a former one instructed TechCrunch that Bench has saved most of its workforce on as unbiased contractors, renewing their 30 day contracts each month as a substitute of hiring them as full-time workers. On the time of the sale, Employer.com mentioned this was a short lived measure.
These folks additionally instructed TechCrunch that Bench has mentioned internally {that a} majority of its workforce can be based mostly exterior of North America. Nevertheless, CMO Charney mentioned the latest cuts mirror “the realities of turning across the enterprise and addressing legacy points, quite than being a part of any strategic outsourcing initiative.”
Charney instructed TechCrunch that Bench is constant to discover longer-term options for workers, which the corporate calls “Benchmates,” however that this construction was essentially the most viable choice to get folks onboarded rapidly post-close.
Past structuring its workforce, Bench has confronted different challenges, the present and former Benchmates instructed TechCrunch. For instance, a lot of Bench clients churned after tax season ended on April 15, they mentioned. Bench additionally wasn’t in a position to end many shoppers’ taxes on time, one particular person instantly conversant in the matter instructed TechCrunch.
Some pissed off clients additionally alleged that Bench charged folks for providers they already paid for below prior possession. (Bench instructed TechCrunch on the time that it honors all pre-paid providers.)
Charney instructed TechCrunch that whereas some clients have left, this was partly an intentional transfer to let go of unprofitable clients.
“Whereas we’ve seen an uptick in buyer churn, a good portion of it has been intentional and obligatory,” Charney mentioned. “Over time, legacy pricing and servicing choices made earlier than our acquisition of Bench led to a subset of consumers being supported at a loss.”
Charney added that going ahead, Bench has plans to develop each options and headcount.
For extra, learn Employer.com’s full assertion on the Bench layoffs right here.
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