Wefox’s CEO is “disgusted” by mass technology layoffs: “These are people”
Wefox CEO Julian Teicke.
Wefox
HELSINKI, Finland — The boss of European digital insurance startup Wefox offered a scathing response to tech companies that have laid off workers.
You like Meta, Amazon and Twitter have laid off tens of thousands of workers in response to pressure from investors as they look to cut costs to weather the global economic downturn.
The Swedish fintech company Klarna was involved the first major employers The tech industry is cutting jobs this year, cutting 10 percent of its workforce in May. Several companies have followed Big Tech’s lead venture capital startups like Stripe.
Wefox CEO Julian Teicke told CNBC that he is “disgusted” by what he sees as the disregard for his employees by some of his peers.
“I’m a little disgusted by statements like ‘never miss a good crisis.’ [or] “We have to cut the fat,” Teicke said in an interview on the sidelines of Slush, a startup conference in Helsinki.
Capital investors have been advises startups in his portfolio to cut costs and freeze hiring, as economists warn impending recession.
After a 2021 stock market full of IPOs and mega-funding rounds, some of Europe’s most valuable startups laid off significant numbers of 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 presented by the challenges of the broader economy.
Forecasting a prolonged recession worse than the crises of 2008 or 2000, Leone said some companies will emerge stronger than others.
“You have a great opportunity in front of you if you play your cards right,” he said. “You have a chance to pass 10 cars. Don’t waste a good recession.”
In some high-profile comments, Klarna CEO Sebastian Siemiatkowski said his company was “lucky” to cut jobs. According to Siemiatkowski, about 90% of those laid off had since found a new job.
“If we had done it today, it probably wouldn’t have been that way, unfortunately,” Semiatkowski told CNBC in an interview.
Without naming names, Teicke chided the tech industry for its approach to mass layoffs.
“These are people who may have quit other jobs to join your company. These are people who may have moved away because of you. These are people who may have ended romantic relationships.”
Teicke said managers have a responsibility to protect their employees.
“I think CEOs have to do everything they can to protect their employees,” he said. “I haven’t seen that in the tech industry. And I’m disgusted by it.”
“These are people,” he added.
Wefox is a Berlin, Germany-based company that connects users seeking insurance with brokers and partner insurance companies through an online platform. Investors valued the company at $4.5 billion in a July funding round.
Wefox says its business is “crisis-proof”. But other insurers have had to make cuts recently, including Lemonade, which in July laid off 20 percent of its staff at Metromile, an auto insurer.
Asked if his own firm should make layoffs in response to changing investor sentiment, Teicke said his firm was “cautious” about the macroeconomic environment, but had no plans for mass layoffs.
“I don’t believe in mass layoffs,” Teicke said. “We focus on performance, but not mass layoffs.” Wefox is “very close” to breaking even next year, he added.