Wefox CEO Julian Teicke.
HELSINKI, Finland – European digital insurance giant Wefox has given a blunt response to tech companies that have laid off more workers.
Favorites of Meta, Amazon and Twitter have laid off tens of thousands of workers under pressure from investors, who want to see them cut costs to cope with the global recession.
Swedish fintech firm Klarna was among the first major tech employers to cut jobs this year, shedding 10% of its workforce in May. Many companies have followed suit, from those in Big Tech to venture-backed startups like Stripe.
Julian Teicke, CEO of Wefox, told CNBC that he is “disgusted” by what he sees as the disregard some of his peers have for their employees.
“I’m a little disgusted by statements like, ‘never miss a good problem’ [or] ‘We have to cut the fat,’ Teicke said in an interview on the sidelines of Slush, a startup conference in Helsinki, Finland.
Venture capitalists are advising their portfolio startups to cut costs and freeze hiring as economists warn of a looming recession.
Following a bumper 2021 full of IPOs and large funding rounds, some of Europe’s most valuable startups have laid off large numbers of employees and significantly scaled back their expansion plans.
At the start of Slush Thursday, Sequoia Capital partner Doug Leone told founders and investors that they should embrace the opportunities presented by the challenges in the broader economy.
Predicting a recession longer 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 a chance to pass 10 cars. Don’t waste the recession.”
In another eyebrow-raising comment, Sebastian Siemiatkowski, CEO of Klarna, said his company was “lucky” to cut jobs when it did. Siemiatkowski said about 90% of the laid off people have already found new jobs.
“If we had done it today, unfortunately it wouldn’t have happened,” Siematkowski told CNBC in an interview.
Without mincing words, Teicke slammed the tech sector for its approach to mass layoffs.
“These are people who have given up other jobs to join your business. These are people who have moved to other places for you. These are people who have ended romantic relationships.”
Teicke said managers have a responsibility to protect their employees.
“I believe that CEOs should do everything they can to protect their employees,” he said. “I’ve never seen that in the tech industry. And I hate that.”
“These are people,” he added.
Wefox is a firm based in Berlin, Germany that connects users looking for insurance with brokers and insurance partners through an online platform. The company was valued by investors at $4.5 billion in a July funding round.
Wefox says its business is “resilient to the problem.” But their peers in insurtechs have been forced to cut back recently, including Lemonade, which laid off 20% of its workforce at Metromile, the auto insurance company it acquired in July.
Asked if his company would need to restructure in response to changing investor sentiment, Teicke said his company is “cautious” about the economic climate but has no plans for mass layoffs.
“I don’t believe in mass deportations,” Teicke said. “We will focus on efficiency, but not on reducing the number of people.” Wefox is “very close” to achieving profitability next year, he added.