Wefox CEO Julian Teike.
HELSINKI, Finland — The head of European digital insurance startup Wefox offered a damning response to tech companies laying off workers en masse.
The likes of Meta, Amazon and Twitter have cut tens of thousands of jobs in response to pressure from investors who want to see them cut costs to weather a global economic downturn.
Swedish fintech company 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 in Big Tech to venture-backed startups like Stripe.
Julian Teike, Wefox’s CEO, told CNBC that he was “disgusted” by what he saw as a disregard for their employees by some of his colleagues.
“I’m a bit disgusted by statements like ‘never miss a good crisis’ [or] “we have to trim the fat,” Teike said in an interview on the sidelines of Slush, a startup conference in Helsinki, Finland.
Venture capitalists are advising startups in their portfolios to cut costs and freeze hiring, while economists warn of an impending recession.
After a great 2021 full of IPOs and mega funding rounds, some of Europe’s most valuable startups have laid off significant staff and drastically scaled back their expansion plans.
At Thursday’s Slush kickoff, Sequoia Capital partner Doug Leone told founders and investors that they should embrace the opportunities created by challenges in the broader economy.
Predicting a prolonged recession worse than the crises of 2008 or 2000, Leone said some companies would emerge stronger than others.
“You have a great opportunity in front of you if you play your cards right,” he said. “You have a chance to pass 10 cars. Don’t waste a good recession.”
In some eyebrow-raising comments, Sebastian Semyatkowski, Klarna’s chief executive, said his firm was “lucky” to cut jobs when it did. Siemiatkowski said roughly 90 percent of laid-off people have since found new jobs.
“If we were to do this today, it probably wouldn’t be the case unfortunately,” Siemiatkowski said in an interview with CNBC.
Without naming names, Teicke criticized the tech industry for its approach to mass layoffs.
“These are people who may have left another job to join your business. These are people who may have moved to other places because of you. These are people who may have ended romantic relationships.”
Teicke said managers have a responsibility to protect their employees.
“I believe CEOs should do everything in their power to protect their employees,” he said. “I haven’t seen that in the tech industry. And I’m disgusted by it.”
“These are people,” he added.
Wefox is a Berlin, Germany-based company that connects consumers seeking insurance with brokers and partner insurers through an online platform. The company was valued by investors at $4.5 billion in a July funding round.
Wefox says its business is “crisis resilient”. But fellow insurers have had to make layoffs recently, including Lemonade, which laid off 20 percent of its staff at Metromile, an auto insurer it acquired in July.
Asked if his own firm would have to make cuts in response to changing investor sentiment, Teicke said his firm was “cautious” about the macroeconomic environment but had no plans for mass layoffs.
“I don’t believe in massive layoffs,” Teike said. “We will focus on performance but not mass layoffs.” Wefox is “very close” to profitability next year, he added.