Late last week InsurTech Pie Insurance held an all-hands meeting during which CEO John Swigart told employees that 14 percent of them — 66 in all are being laid off.
“This decision was made as part of our wider budget revision process that we have undertaken over the last few months,” Swigart told employees in a message posted to Pie’s website.
Detailing the decision, Swigart said that with the deterioration of the funding environment since it raised a $315 million Series D round of funding in September, the future outlook for capital raises “has been pushed out even further, which necessitates these expense reductions.”
During Carrier Management’s InsurTech Summit earlier in May, Swigart said the inability to raise funding in today’s market would continue to be challenging.
“I don’t know for how long that’s going to last, but it’s probably going to outlast a lot of companies’ cash positions, frankly,” he said.
Swigart said Pie, specializing in workers compensation insurance for small businesses, will revise its three-year plan to remain profitable with the cash it has on hand.
“Over the past three months, Pie’s leadership team has been working on these revisions and ultimately identified over $25 million in annual expenses to eliminate from our budget,” Swigart said. “Without impacting our focus and investment in technology innovation, we first looked at aggressively cutting non-headcount expenses, with more than half of our total reductions ultimately not staff related. Unfortunately, we could not achieve our overall target without also making reductions to headcount.”
Laid off workers, told May 18, will get severance pay and health benefits, career-placement coaching, and can keep equipment.
“With this decision, we will tighten our focus and restructure a number of teams to ensure that our highest priority objectives are achieved. We will provide much more detail on these changes over the coming days and weeks,” Swigart added.