Wefox CEO Julian Teicke.
HELSINKI, Finland — The boss of European digital insurance startup Wefox has offered a damning response to tech companies that have laid off workers en masse.
The tastes of Meta, Amazon and Twitter have laid off tens of thousands of employees in response to pressure from investors, who want them to cut costs to weather a global economic downturn.
Swedish fintech Klarna was among the first major tech employers to cut jobs this year, shedding 10% of its workforce in May. Several companies have followed suit, from those at Big Tech to startups backed by companies like Stripe.
Wefox CEO Julian Teicke told CNBC he was “disgusted” by what he sees as a disregard from some of his peers for their employees.
“I’m a little disgusted by statements like ‘never miss a good crisis’ [or] ‘we need to cut the fat,'” Teicke said in an interview on the sidelines of Slush, a startup conference in Helsinki, Finland.
Venture capitalists have advised startups in their portfolios to cut costs and freeze hiring as economists warn of a looming recession.
After a stellar 2021 filled with IPOs and mega funding rounds, some of Europe’s most valuable startups have laid off significant numbers of employees and drastically scaled back their expansion plans.
At the start of Slush Thursday, Sequoia Capital partner Doug Leone told founders and investors that they should seize the opportunities brought by challenges in the broader economy.
Predicting a prolonged recession worse than the crises of 2008 or 2000, Leone said some companies will emerge stronger than others.
“You have a great opportunity ahead of you, if you play your cards right,” he said. “You have the opportunity to overtake 10 cars. Don’t waste a good recession.”
In some chilling comments, Klarna CEO Sebastian Siemiatkowski said his company was “lucky” to cut jobs when it did. Siemiatkowski said about 90% of those laid off have since found new jobs.
“If we had done it today, unfortunately it probably wouldn’t have been the case,” Siemiatkowski told CNBC in an interview.
Without naming names, Teicke criticized the tech industry for its approach to mass layoffs.
“These are people who may have left other jobs to join your company. These are people who may have moved because of you. These are people who may have ended romantic relationships. .”
Teicke said managers have a responsibility to protect their employees.
“I think CEOs need to do everything in their power to protect their employees,” he said. “I’ve never seen this in the tech industry. And it disgusts me.”
“They are humans,” he added.
Wefox is a Berlin, Germany-based company that connects users seeking insurance with partner brokers and insurers through an online platform. The company was valued by investors at $4.5 billion in a funding round in July.
Wefox says its business is “crisis-proof”. But other insurtechs have had to make cuts lately, including Lemonade, which laid off 20% of staff at Metromile, an auto insurance company it acquired in July.
Asked if his own company should make layoffs in response to changing investor sentiment, Teicke said his company was “cautious” about the macro environment but had no plans for layoffs. massive.
“I don’t believe in mass layoffs,” Teicke said. “We will focus on performance, but not on mass layoffs.” Wefox is “very close” to achieving profitability next year, he added.