Wefox CEO Julian Teike.
HELSINKI, Finland. The head of European digital insurance startup Wefox has issued a scathing response to tech companies that are laying off employees en masse.
Similar 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 the global economic downturn.
Swedish fintech firm Klarna was one of the first major tech employers to cut jobs this year, cutting 10% of its workforce in May. Several companies have followed suit, from big tech companies to venture capital startups like Stripe.
Julian Teike, CEO of Wefox, told CNBC that he is “disgusted” by what he sees as slights from some of his colleagues towards their employees.
“I’m a little disgusted by statements like ‘never miss a good crisis.’ [or] “We have to cut 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 as economists warn of a looming recession.
After an all-time 2021 full of IPOs and massive 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 beginning of Slush on Thursday, Sequoia Capital partner Doug Leone told the founders and investors that they should seize the opportunities stemming from problems in the broader economy.
Predicting a protracted recession worse than the crises of 2008 or 2000, Leone said some companies will outperform others.
“You have a great opportunity if you play your cards right,” he said. “You have the opportunity to pass 10 cars. Don’t waste a good recession.”
In some surprising comments, Sebastian Siemiatkowski, CEO of Klarna, said his firm was “lucky” to cut jobs when it happened. Siemiatkowski said roughly 90% of those laid off have since found new jobs.
“If we had done it today, it probably wouldn’t have happened, unfortunately,” Siemiatkowski told CNBC.
Without naming names, Teike criticized the technology industry for its approach to mass layoffs.
“These are people who may have quit other jobs 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.”
Teike said managers have an obligation to protect their employees.
“I believe leaders should do everything in their power to protect their employees,” he said. “I have not seen this in the high-tech industry. And I hate it.”
“These are the people,” he added.
Wefox is a company based in Berlin, Germany that connects users looking for insurance with brokers and insurance partners through an online platform. In a July funding round, the company was valued by investors at $4.5 billion.
Wefox says its business is “crisis resilient”. But other insurance companies have had to cut staff lately, including Lemonade, which has cut 20% of its workforce at Metromile, an auto insurance company it acquired in July.
Asked if his own firm would have to lay off employees due to a shift in investor sentiment, Teike said his firm was “cautious” about the macroeconomic environment but was not planning mass layoffs.
“I don’t believe in mass layoffs,” Teike said. “We’re going to focus on productivity, not mass layoffs.” He added that Wefox is “very close” to achieving profitability next year.