Shocking Layoffs at Fintech Startup Bench: What You Need to Know

Major Layoffs at Bench

Bench, the accounting and tax startup acquired in a fire sale last December, has confirmed significant layoffs. While the exact number of affected employees remains undisclosed, estimates suggest that dozens of positions have been eliminated, impacting departments such as client success and tax services. The U.S.-based tax advisory team has been particularly hard hit.

Background on Bench's Financial Struggles

Previously, Bench raised over $110 million in VC funding and $50 million in debt but failed to achieve profitability. The startup burned through its cash, leading to its abrupt closure and a complete staff layoff, leaving thousands without access to their accounting records. Employer.com acquired Bench for $9 million, re-hiring most of its workforce and vowing to revive the company.

Current Workforce Structure

Despite the recent layoffs, many employees have transitioned to independent contractors, with 30-day contracts being renewed monthly. This structure is said to be temporary, yet it has raised concerns among staff about job security. According to CMO Matt Charney, the layoffs are part of a strategy to address legacy issues rather than a move toward outsourcing.

Customer Challenges and Company Strategy

Bench is also facing challenges with customer retention, particularly after the tax season. Reports indicate a significant churn of customers who felt dissatisfied with the service, including allegations of being charged for services already paid for. Charney noted that while some customer loss was unintentional, it was partly a strategic decision to let go of unprofitable accounts.

Looking ahead, Bench aims to expand its features and workforce while navigating the complexities of its current operational landscape. For further insights, you can read Employer.com’s full statement on the layoffs.