The Bench, an accounting and tax startup purchased for fire sales last December, was confirmed by TechCrunch.
The bench did not specify the number of people affected, but one person working there estimated that the bench had eliminated dozens of positions. This is the majority of the approximately 300 people working for the company.
Departments like client success and tax services have been directly affected, and one is directly familiar with the issue of telling TechCrunch that most of the US-based tax advisory team has been eliminated.
Employer.com, a San Francisco HR high-tech company that purchased the bench last year, told TechCrunch about its decision to “not be made lightly.”
“We are deeply grateful for the contributions of our employees who have worked tirelessly to maintain these accounts,” said Employer.com CMO Matt Charney.
Under previous ownership, the bench raised more than $110 million in VC funding and more than $50 million in debt, but did not reach profitability. The company burned cash, suddenly shut down, fired all staff, leaving thousands of customers without access to the book. Employer.com then swooped, buying a bench for $9 million, rehiring most of the startup’s employees, and pledging to revive the startup.
This move saved the bench from the total collapse.
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But the two current bench workers and the former said the benches maintain a large portion of their workforce as independent contractors, renewing their 30-day contracts per month instead of hiring them as full-time employees. At the time of sale, Employer.com said this was a temporary measure.
These people also told TechCrunch that the Bench internally said that the majority of its workforce would be based outside of North America. However, CMO Charney said the recent cuts reflect “the reality that they are not part of a strategic outsourcing initiative, but rather that they will turn the business around and address legacy issues.”
Charney told TechCrunch that the bench continues to explore long-term solutions for its employees, but the company calls it “benchmates,” but the structure is the most viable option for closing people off quickly.
The current and former benchmates have told TechCrunch that they face other challenges beyond structuring their workforce. For example, they said many bench customers were fired after the tax season ended on April 15th. The bench also failed to finish taxes on time for many clients, and one told TechCrunch that he was directly familiar with the issue.
Some frustrated customers claimed that the bench had charged people for services they had already paid under previous ownership. (At the time, the bench told TechCrunch that it would celebrate all prepaid services.)
Charney told TechCrunch that this was a deliberate move to let go of some of the customers that weren’t adopted.
“We’ve seen an increase in customer churn, and a significant portion of that was intentional and necessary,” Charney said. “Over time, legacy pricing and service decisions made prior to the acquisition of the bench have put a subset of our customers at a loss.”
Charney added that the bench plans to expand both functionality and personnel in the future.
For more information, please see Employer.com’s full statement regarding bench layoffs here.
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