Fintech Bench Announces Layoffs as Industry Shifts to Month-to-Month Operations

Bench, a prominent startup in the accounting and tax sector, has recently undergone significant layoffs, a move that has drawn attention in the tech community. Acquired last December in a fire sale, the company is now restructuring its workforce as part of its efforts to regain stability and profitability.

Overview of Recent Layoffs at Bench

Although Bench has not disclosed the exact number of layoffs, estimates suggest that dozens of positions have been eliminated, affecting a substantial portion of its approximately 300 employees. The layoffs primarily impacted departments such as Client Success and Tax Services. Notably, a significant reduction occurred within the U.S.-based tax advisory team.

Reasons Behind the Layoffs

Employer.com, the HR tech company that acquired Bench for $9 million, stated that these layoffs were not made lightly. Matt Charney, CMO of Employer.com, expressed appreciation for the hard work of the employees who managed client accounts during challenging times.

Bench’s Financial Challenges

Under its previous ownership, Bench raised over $110 million in venture capital and more than $50 million in debt but struggled to achieve profitability. This financial instability led to a sudden shutdown, which left many customers without access to their accounts. The acquisition by Employer.com aimed to rescue the company from total collapse.

Current Workforce Structure at Bench

Reports indicate that many of the remaining employees are now working as independent contractors, with their contracts renewed every month. While Employer.com indicated this was a temporary measure during the transition, it appears to be a strategy to manage costs effectively.

• Majority of workforce to be based outside North America.
• Quick onboarding of independent contractors to streamline operations.

Customer Retention and Service Challenges

Bench has faced significant challenges in retaining customers, especially after the tax season concluded on April 15. Some customers reported dissatisfaction due to delays in completing tax returns and alleged billing issues related to services paid for under prior ownership. However, Bench has assured customers that all pre-paid services would be honored.

Strategic Changes Moving Forward

Charney noted that while customer churn has increased, some of it was a strategic decision to cut ties with unprofitable clients. He emphasized the need for restructuring to ensure the long-term sustainability of the business.

• Plans to enhance features and expand employee headcount.
• Focus on addressing legacy pricing and service issues.

For more detailed information, you can read the full statement from Employer.com regarding the Bench layoffs here.

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