Bench, an accounting and tax startup that was rescued from financial distress last December by Employer.com, has recently announced a substantial round of layoffs, confirming to TechCrunch that the company is shedding numerous roles. Although the specific number of affected employees was not disclosed, estimates suggest that several dozen positions may have been cut from its workforce of roughly 300.
The layoffs primarily affected departments such as client success and tax services, with many members of the U.S. tax advisory team being let go. Employer.com stated that the decision was a challenging but necessary move. Matt Charney, CMO of Employer.com, expressed gratitude for the previous employees’ hard work amid the company’s struggles.
Bench, under prior ownership, had raised over $110 million in venture capital and more than $50 million in debt but failed to achieve profitability, ultimately leading to its abrupt closure and a total staff layoff, leaving customers unable to access their financial records. Employer.com intervened, purchasing Bench for $9 million and reinstating much of its workforce while pledging to revive the company.
Despite this move saving Bench from complete collapse, reports suggest that the majority of the current workforce is now employed as independent contractors on a month-to-month basis rather than as full-time staff. This arrangement was described as temporary during the transition.
Charney indicated that the recent layoffs were necessary to address longstanding issues within the business, not simply a strategy for outsourcing. While the company aims to explore longer-term employment options, the current structure allows for a quicker onboarding of personnel post-acquisition.
Despite the restructuring, Bench is grappling with other significant challenges. There has been a notable customer churn following the recent tax season closure on April 15, compounded by issues with timely tax completion. Reports from former employees indicated that some clients felt they were charged for services they had already prepaid under previous ownership. In response, Charney clarified that some customer departures were an intentional strategy to eliminate unprofitable accounts stemming from legacy pricing and service models.
Looking to the future, Charney affirmed that Bench plans to expand its features and workforce, indicating a commitment to recovery and growth.
For further information, Employer.com has released a full statement regarding the recent layoffs at Bench.
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