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CEO of Tech Firm Slams his Peers Over Layoffs: 'These are humans'

In response to pressure from investors, companies like Meta, Amazon and Twitter have laid off tens of thousands of employees in an effort to cut costs and weather a global economic downturn.

November 24, 2022
8 minutes
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In response to pressure from investors, companies like Meta, Amazon and Twitter have laid off tens of thousands of employees in an effort to cut costs and weather a global economic downturn.

In May, Swedish fintech firm Klarna became one of the first major employers in tech to slash jobs, cutting 10% of its workforce. Several other companies have followed suit, from Big Tech firms to venture-backed startups like Stripe.

Julian Teicke, CEO of Wefox, told CNBC that he is "disgusted" by what he views as a disregard by some of his peers for their employees. Teicke said that he believes that this disregard is "unacceptable" and that he will continue to fight for the rights of workers.

Teicke expressed disgust at statements like "never miss a good crisis" or "we have to cut the fat" in an interview on the sidelines of the Slush startup conference in Helsinki, Finland.

Venture capitalists are advising startups in their portfolios to cut costs and freeze hiring as economists warn of an impending recession. This is a prudent measure to take in order to weather the storm and keep the business afloat.

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

At the start of Slush on Thursday, Doug Leone of Sequoia Capital told founders and investors that they should embrace opportunities brought by challenges in the broader economy. Leone said that these challenges can be turned into opportunities if approached in the right way.

Leone said that some companies will emerge stronger than others during a prolonged recession that is worse than the 2008 or 2000 crises. He said that I had a great opportunity in front of me and that if I played my cards right, I could pass 10 cars. He told me not to waste a good recession.

Sebastian Siemiatkowski, CEO of Klarna, made some eyebrow-raising comments when he said his firm was "lucky" to cut jobs when it did. Siemiatkowski said that roughly 90% of the people laid off had since found new jobs.

Siemiatkowski told CNBC in an interview that if they had done that today, it probably would not have been the case.

Teicke criticized the tech industry for its approach to mass redundancies, without naming any names.

These are people who have made significant sacrifices to join your business. They may have left other jobs or moved to new locations in order to be a part of what you're doing. They may have even ended relationships in order to devote themselves to your company.

Teicke said that managers have a responsibility to protect their employees. He added that this is especially important in today's climate.

The CEO continued, "I believe that CEOs have a responsibility to do everything in their power to protect their employees. Unfortunately, I haven't seen that in the tech industry. I'm disgusted by that." He added that these are humans.

Wefox is a Berlin, Germany-based company that connects users seeking insurance with brokers and partner insurers through an online platform. In July, the company received funding from investors that valued it at $4.5 billion.

Wefox has stated that its business is "crisis-resistant." However, other insurtech companies have had to make cuts as of late, including Lemonade. Lemonade let go of 20% of staff at Metromile, a car insurance company it acquired, last July.

Teicke said that his firm is cautious about the macroeconomic environment but that there are no plans for mass layoffs at this time. He noted that investor sentiment can shift quickly, so his firm is always prepared to make changes as necessary.

Teicke stated that he does not believe in mass layoffs and that the company will focus on performance instead. He also mentioned that Wefox is very close to achieving profitability next year.

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Cathy Hills
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