Home World Wefox CEO ‘disgusted’ by massive tech layoffs: ‘It’s the people’

Wefox CEO ‘disgusted’ by massive tech layoffs: ‘It’s the people’

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Wefox CEO Julian Teike.

Wefox

HELSINKI, Finland — The head of European digital insurance startup Wefox has offered a damning response to tech companies that have been laying off workers en masse.

Similar Meta, Amazon and Twitter have laid off tens of thousands of employees in response to pressure from investors who want them to cut costs to weather the global economic downturn.

Among them was the Swedish fintech firm Klarna the first major employers in technology to cut jobs this year, cutting 10% of its workforce in May. Several companies have followed suit, from those in Big Tech to venture capital startups like Stripe.

Julian Teike, CEO of Wefox, told CNBC that he is “disgusted” by what he sees as the neglect of his employees by some of his colleagues.

“I’m a bit sick of statements like ‘never miss a good crisis’ [or] “We have to cut the fat,” Teike said in an interview on the sidelines of Slush, a startup conference in Helsinki, Finland.

There were venture capitalists advising startups on their cost-cutting portfolios and freeze hiring, as economists warn the coming recession.

After a successful 2021 full of IPOs and mega funding rounds, some of the most valuable startups in Europe have laid off significant staff and drastically scaled back their expansion plans.

At the start of Slush on Thursday, Sequoia Capital partner Doug Leone told founders and investors that they should seize the opportunities associated with the problems in the economy as a whole.

Prediction a long decline worse than the crises of 2008 or 2000, Leone said some companies will emerge stronger than others.

“You have a great opportunity if you play your cards right,” he said. “You have the opportunity to pass 10 cars. Don’t waste a good slump.”

In some stunning comments, Sebastian Siemiatkowski, Klarna’s CEO, said his firm was “lucky” to cut jobs when it happened. Semyatkowski said that approximately 90% of those laid off have since found new jobs.

“If we had done it today, it probably wouldn’t have happened,” Siemiatkowski said in an interview with CNBC.

Without naming names, Teike criticized the tech industry for its approach to mass layoffs.

“These are people who may have quit another job to join your business. These are people who may have moved to other places because of you. These are people who may have ended romantic relationships.’

Teike said supervisors have a responsibility to protect their employees.

“I believe that CEOs should do everything in their power to protect their employees,” he said. “I haven’t seen anything like this in the tech industry. And it disgusts me.”

“It’s the people,” he added.

Wefox is a Berlin-based firm that connects users looking for insurance with brokers and partner insurers via an online platform. The company was valued by investors at $4.5 billion in a July funding round.

Wefox says its business is “crisis resilient”. But fellow insurers have had to cut back recently, including Lemonade, which laid off 20% of its workforce at Metromile, the auto insurance company it acquired in July.

Asked whether his own firm would have to cut staff in response to changing investor sentiment, Teike said his firm was “cautious” about the macroeconomic environment but did not plan mass layoffs.

“I don’t believe in mass layoffs,” Teike said. “We will focus on productivity, but not mass layoffs.” Wefox is “very close” to achieving profitability next year, he added.

Wefox's founder explains the possibilities of the digital insurance industry

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