Layoffs have begun to hit the insurtech sector as both Slice Labs Inc. and Bold Penguin Inc. moved to reduce staffing this week.
Slice Labs, an insurtech startup, has let go of 28 employees, roughly a third of its workforce, as well as 13 co-op students, according to an announcement from CEO Timothy Attia.
“The current environment has impacted our business and we were faced with having too many resources,” he said in a letter published on the firm’s website.
“Due to the economic conditions surrounding the COVID-19 pandemic, we have been seeing a drop in quote activity across all experiences in small commercial,” Bold Penguin said in a statement. “As a result, we made the difficult decision to make an adjustment to our staffing, primarily around the call center teams, marketing, and some longer range non-core initiatives.”
The company remains hopeful for a turnaround.
“As many small to midsize businesses reopen after the shelter-in-place is lifted, we believe the inquiries and usage will gradually go up and digital transformation will be key for success,” the statement said.
San Francisco-based Newfront Insurance Inc. confirmed layoffs of approximately 90 announced April 10 in a blog on the company’s website, also announcing executive pay cuts.
“For Newfront, the shift in credit markets and the consensus outlook for near-term economic activity presents us with a dramatically different set of operating conditions than we had anticipated at the start of the year,” company co-founder and CEO Spike Lipkin wrote. “On Monday, we made the incredibly difficult decision to restructure our business to operate effectively within the new environment. Unfortunately, that required us to reduce our workforce, especially on our engineering, recruiting, strategic growth, and operations teams.”
Newfront slashed spending on events, advertising and travel, instituted a hiring freeze and cut most of its executive pay by 20%, with co-founders Gordon Wintrob and Mr. Lipkin cutting salaries to zero.
Pillar Technologies Inc., a New York-based insurtech firm that makes sensors used on construction projects that collect information and readings on such measurements as temperature, moisture and particulate matter, is cutting expenses but has not laid off any workers, New York-based founder and CEO Alex Schwarzkopf said.