Wefox CEO ‘disgusted’ by mass tech layoffs: ‘These are humans’

Wefox CEO Julian Teike.

Wefox

HELSINKI, Finland — The head of European digital insurance startup Wefox has hit back at tech companies that have laid off workers en masse.

those who like Meta, Amazon and Twitter has laid off tens of thousands of employees in response to pressure from investors to cut costs to weather the global economic downturn.

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

Wefox CEO Julian Teike told CNBC that he is “disgusted” by some of his peers for treating their employees with disrespect.

“I abhor the saying ‘never miss a good crisis.’ [or] “We need to trim the fat,” Teike said in an interview on the sidelines of the Slush startup conference in Helsinki, Finland.

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Venture capitalists have advised startups in their portfolios to cut costs and freeze hiring as economists warn of a looming recession.

After a bumper 2021 filled with IPOs and mega funding rounds, some of Europe’s most valuable startups have cut back significant expansion plans, laying off significant numbers of employees.

At Slush’s launch Thursday, Sequoia Capital partner Doug Leone told founders and investors to embrace the opportunities that challenges in the broader economy bring.

Amazon's CEO said the layoffs will continue through 2023

Leone, who predicted a prolonged recession worse than the crises of 2008 or 2000, said some companies would be stronger than others.

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

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Klarna CEO Sebastian Siemiatkowski said in some comments that his firm was “happy” to cut jobs. According to Siemiatkowski, about 90 percent of the people who were laid off have since found a new job.

“If we were to do it today, unfortunately, it wouldn’t happen,” Siemiatkowski told CNBC.

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

“These people may have left other jobs to join your business. These people may have moved to other places because of you. These people may have ended a romantic relationship.”

Teike said managers have a duty to protect their employees.

“I think CEOs should do everything they can to protect their employees,” he said. “I’ve never seen anything like this in the tech industry. I’m disgusted by it.”

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“It’s the people,” he added.

Wefox is a Berlin, Germany-based firm that connects users looking for insurance with brokers and partner insurers through an online platform. Investors valued the company at $4.5 billion in a July funding round.

Wefox says its business is “crisis resilient”. But other insurtechs have been forced to cut back recently, including Lemonade, which in July laid off 20% of its workforce at Metromile, the auto insurance company it bought.

Asked if his firm would have to make layoffs in response to changing investor sentiment, Teike said his firm is “cautious” about the macroeconomic environment but has no plans for mass layoffs.

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

Wefox founder explains the opportunity in the digital insurance industry

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