TriNet Zenefits
{{short description|American human resources company}}
{{Infobox company
|name = YourPeople, Inc.
|logo = TriNet Zenefits.svg
|trade_name = TriNet Zenefits
|type = Subsidiary
|industry = Human resource management
|revenue = {{increase}} {{USD|43.5 million}} (2016){{cite web |url=https://www.cnbc.com/2016/12/02/zenefits-is-losing-200-million-a-year.html|title=Zenefits Lost $200 Million Last Year|last=Alden|first=William|date=December 2, 2016|website=CNBC|access-date=January 24, 2017}}
|location_city = San Francisco, California
|location_country = United States
|area_served = United States
|founders = {{ubl|Parker Conrad|Laks Srini}}
|key_people = Jay Fulcher (CEO)
|founded = {{start date and age|2013|02|18}}
|parent = TriNet
|homepage = {{URL|https://www.zenefits.com/}}
}}
TriNet Zenefits (legally known as YourPeople, Inc. and previously known as Zenefits) is a technology company based in San Francisco that provides cloud-based software as a service to companies for managing their human resources, with a focus on payroll and health insurance coverage.{{cite news|url=https://www.nytimes.com/2014/09/21/business/zenefits-leader-is-rattling-an-industry-so-why-is-he-stressed-out.html |title=Zenefits' Leader Is Rattling an Industry, So Why Is He Stressed Out? |last=Manjoo |first=Farhad |work=The New York Times |date = September 21, 2014 |access-date = January 21, 2015}}{{cite news|url=https://blogs.wsj.com/digits/2013/05/01/zenefits-tries-to-take-the-pain-out-of-human-resources/ |title = Zenefits Tries to Take the Pain Out of Human Resources |last=Lynley |first=Matthew |newspaper = Wall Street Journal |date=May 1, 2013 |access-date=January 21, 2015}} The company was founded in 2013.{{cite web |url=https://www.nytimes.com/2016/10/13/technology/zenefits-a-rocket-that-fell-to-earth-tries-to-launch-again.html |title=Zenefits, a Rocket That Fell to Earth, Tries to Launch Again |last=Manjoo |first=Farhad |website=The New York Times |date=October 12, 2016 |access-date=November 18, 2016}}
History
Zenefits was started by Parker Conrad and Laks Srini to help startups and small businesses find insurance quotes and manage employee benefits in one place. It officially launched on February 18, 2013.{{cite news|url=https://techcrunch.com/2013/02/18/y-combinator-backed-zenefits-gives-small-businesses-a-one-stop-shop-for-finding-and-managing-employee-benefits/ |title=Y Combinator-Backed Zenefits Gives Small Businesses A One-Stop Shop For Finding And Managing Employee Benefits |last=Empson |first=Rip |date=February 18, 2013 |access-date=January 20, 2015 |work=TechCrunch }}
In January 2014, the company announced the addition of commuter spending, flexible spending, and 401(k) support, to replace functions usually handled by companies' human resources departments.{{cite news|url=https://techcrunch.com/2014/01/10/fast-growing-zenefits-adds-commuter-benefits-flexible-spending-and-401k-support-as-it-moves-to-take-over-startup-hr/ |title=Fast-Growing Zenefits Adds Commuter Benefits, Flexible Spending And 401(k) Support As It Moves To Take Over Startup HR |last=Empson |first=Rip |date=January 10, 2014 |access-date=January 20, 2015 |work=TechCrunch }} In July, the company announced support for stock options in its cloud HR platform.{{cite news |url=https://techcrunch.com/2014/07/25/zenefits-stock-options/ |title=Zenefits Adds Stock Options To Its Cloud HR Platform |last=Lawler |first=Ryan |date=July 25, 2014 |access-date=January 21, 2015 |work=TechCrunch }}
In May 2015, Zenefits announced it had raised $500 million from investors, including Fidelity Management, TPG, and Comcast Ventures, at a valuation of $4.5 billion.{{cite news
|url=http://pando.com/2015/05/06/zenefits-raises-500-million-for-its-hr-software-and-insurance-hybrid-beating-off-new-customers-with-a-stick/ |title=Zenefits raises $500 million for its HR software and insurance hybrid, beating off new customers 'with a stick' |last=Keohane |first=Dennis |date=May 6, 2015 |access-date=May 6, 2015 |work=PandoDaily }}{{cite web
|url=https://blogs.wsj.com/digits/2015/05/06/zenefits-tagged-with-4-5-billion-valuation-after-just-two-years/ |title=Zenefits Is Tagged With a $4.5 Billion Valuation After Just Two Years |last=MacMillan |first=Douglas |date=May 6, 2015 |access-date=May 6, 2015 |type=blog |website=Digits |publisher=Dow Jones & Company }}{{cite news
|url=http://www.multichannel.com/news/technology/comcast-ventures-friends-zenefits/390944 |title=Comcast Ventures Is Friends with Zenefits |last=Baumgartner |first=Jeff |date=May 29, 2015 |access-date=May 29, 2015 |publisher=NewBay Media |location=New York City |work=Multichannel News }}
=Service issues=
In 2014 and 2015, Zenefits had many publicly noted issues and admitted mistakes in its delivery of potentially life-impacting health insurance coverage due to its alleged haphazard setup and delivery of insurance products. In one particular instance, for example, there were several months of delays and multiple repeated issues and glitches in obtaining the correct health insurance coverage for a company in Pennsylvania, leading to gaps in coverage and denied or delayed medical care for some of their employees and families. Over a dozen other customers of Zenefits came forward, both publicly and anonymously, with stories of similar issues for a BuzzFeed investigation into these complaints published in July 2015. https://www.buzzfeednews.com/article/williamalden/zenefits-hr-rocket-ship-but-some-customers-left-behind
These reported mistakes were mainly attributed to the chaos, confusion and turnover surrounding Zenefits' rapid growth and its buggy, inefficient software. In a BuzzFeed article which interviewed more than a dozen current and former users of Zenefits at that time, customers were quoted as saying that Zenefits turned the benefits process into an "expensive nightmare" and ended up being worse than the original manual, paper-based process it was supposed to replace. Customers would often have to revert to manual processes and paper forms to obtain benefits due to frequent software bugs and brokerage issues at Zenefits during this time. https://www.buzzfeednews.com/article/williamalden/zenefits-hr-rocket-ship-but-some-customers-left-behind
=Compliance issues=
In 2016, an internal legal investigation at Zenefits found the company's licensing was out of compliance and that Parker Conrad, CEO had created a browser extension to skirt training requirements for selling insurance in California.{{Cite web |last=Caspi |first=Heather |date=30 November 2016 |title=Zenefits slapped with multi-million dollar fine over licensing violations |url=https://www.healthcaredive.com/news/zenefits-slapped-with-multi-million-dollar-fine-over-licensing-violations/431286/ |access-date=2024-09-24 |website=Healthcare Dive |language=en-US}}{{cite web|url=https://www.buzzfeed.com/williamalden/zenefits-program-let-insurance-brokers-fake-training|title=Zenefits Software Helped Brokers Cheat On Licensing Process|last=Alden|first=Will|website=BuzzFeed |date=February 11, 2016|access-date=November 28, 2016}} After self-reporting these issues, Zenefits hired an independent third party to do an internal audit of its licensing controls and sent the report to all 50 states.{{cite news|url=https://money.cnn.com/2016/02/08/technology/zenefits-new-ceo-compliance/|title=Zenefits CEO steps down over compliance issues|last=O'Brien|first=Sara Ashley |newspaper=Cnnmoney |date=February 8, 2016|access-date=November 28, 2016}} The California Department of Insurance as well as the Massachusetts Division of Insurance began investigations of their own based on Zenefits' report.{{cite news|last1=Suddath|first1=Claire|last2=Newcomer|first2=Eric|title=Zenefits Was the Perfect Startup. Then It Self-Disrupted.|url=https://www.bloomberg.com/features/2016-zenefits/|access-date=16 May 2016|work=Bloomberg Businessweek|issue=9 May 2016|date=9 May 2016}}{{cite news|last1=Fernandes|first1=Deirdre|title=Mass. insurance regulator investigates benefits software firm|url=https://www.bostonglobe.com/business/2016/03/08/mass-insurance-regulator-investigates-zenefits/KUxhD377A8ad4ESdZXf6FK/story.html|access-date=16 May 2016|work=The Boston Globe|issue=9 Mar 2016}} Parker Conrad resigned as CEO and director in February and COO David O. Sacks was named as his replacement.{{cite news|last1=Solomon|first1=Brian|title=Zenefits CEO Parker Conrad Resigns Amid Scandal|url=https://www.forbes.com/sites/briansolomon/2016/02/08/zenefits-ceo-parker-conrad-resigns-amid-scandal/#6964cea45f3a|access-date=May 16, 2016|work=Forbes|date=February 8, 2016}}
=Workplace culture=
On February 26, 2016, Zenefits laid off 250 people, about 17 percent of its employees.Lynley, Matthew (16 February 2016) [https://techcrunch.com/2016/02/26/zenefits-is-laying-off-250-employees/ "Zenefits Is Laying Off Roughly 250 Employees."] TechCrunch. (Retrieved 6-14-2016). In June the company laid off another 9 percent (106 additional people).Lynley, Matthew (16 June 2016) [https://techcrunch.com/2016/06/14/zenefits-is-laying-off-another-106-people-and-offering-others-a-buyout/ "Zenefits is laying off another 106 people and offering others a buyout."] TechCrunch. (Retrieved 6-14-2016).
=Regulatory settlements and fines=
In July, Zenefits reached its first state regulatory settlement with Tennessee for $62,500,{{cite web |url=https://www.tn.gov/commerce/news/44151|title=TDCI Levies $62,500 Fine Against Zenefits|date=July 25, 2016 |access-date=November 18, 2016}} four months after the company's initial self-reporting of compliance issues to the states in which they had been operating. Settlements with additional states followed.{{cite web|url=http://www.latimes.com/business/technology/la-fi-tn-zenefits-fine-20161128-story.html|title=Employee benefits start-up Zenefits is fined $3.5 million for licensing violations|last=Dave|first=Paresh|website=Los Angeles Times |date=November 28, 2016|access-date=December 6, 2016}}{{cite web|url=https://www.buzzfeed.com/williamalden/zenefits-settles-insurance-investigation|title=Zenefits Settles Insurance Investigation In Washington State|last=Alden |first=William|website=BuzzFeed |date=October 7, 2016|access-date=November 28, 2016}}{{cite web |url=http://www.bizjournals.com/sanfrancisco/news/2016/09/13/zenefits-settles-licensing-disputes-5-states.html|title=Zenefits settles with five more states over broker licensing snafus |last=Rauber |first=Chris |date=September 13, 2016 |access-date=November 18, 2016}}{{cite web |url=http://www.tdi.texas.gov/news/2016/tdi10142016.html|title=Texas Department of Insurance fines Zenefits $550,000|date=2016-10-14 |access-date=November 18, 2016}} On November 28, Zenefits was fined $7 million by California's insurance regulator for allegedly disobeying insurance laws.{{cite web|url=https://www.reuters.com/article/us-zenefits-penalty-idUSKBN13O05N |title=Zenefits hit with $7 million fine by California insurance regulator |website=Reuters |date=November 28, 2016 |access-date=January 28, 2021}}
In 2017, the company was fined $1.2 million for violations against New York Insurance Law.{{Cite web |date=2017-04-11 |title=DFS Fines Zenefits $1.2 Million for Repeated Violations of New York Insurance Law |url=https://www.dfs.ny.gov/reports_and_publications/press_releases/pr1704111 |access-date=2024-10-17 |website=Department of Financial Services |language=en}}{{non-primary source needed|date=October 2024}}
=Transformation and further layoffs=
On February 3, 2017, Jay Fulcher was appointed as new CEO and Chairman.{{cite web|url=https://fortune.com/2017/02/06/zenefits-ceo-jay-fulcher/ |title=Zenefits Names Tech Industry Vet as New CEO |website=Fortune |date=2016-02-06 |access-date=January 28, 2021}} On February 9, Zenefits announced it would be laying off 45% of its workforce as a way to "move toward an operating model that is sustainable and better reflects the needs of our current business" as noted by Fulcher in a memo sent to employees.{{cite web|url=http://www.businessinsider.com/zenefits-layoffs-cut-nearly-500-employees-full-email-2017-2/ |title=Troubled startup Zenefits just laid off almost half its staff — here's the full email sent to employees |website=Business Insider |date=February 9, 2017 |access-date=January 28, 2021}}{{cite web|url=https://techcrunch.com/2017/02/09/zenefits-is-laying-off-45-of-its-workforce/ |title=Zenefits is laying off 45% of its workforce |website=TechCrunch |date=February 9, 2017 |access-date=January 28, 2021}} In September, the company changed its business model from an insurance broker to a SaaS software platform for brokers, offering HR, payroll, benefits and wellness applications to small businesses and insurance brokers. It also announced it was partnering with Atlanta-based broker OneDigital to offer broker partner-based regional support.{{cite web|url=https://techcrunch.com/2017/09/21/zenefits-tries-a-rebrand-and-hands-off-insurance-brokerage/ |title=Zenefits tries a rebrand and hands off insurance brokerage |website=Techcrunch |date=September 21, 2017 |access-date=January 28, 2021}} OneDigital became the first member of Zenefits' new Broker Partner Program.{{cite web|url= https://www.bizjournals.com/sanfrancisco/news/2017/09/21/zenefits-big-switch-from-fighting-brokers.html |title=Zenefits' big switch: From fighting brokers to serving them |website=San Francisco Business Times|date=September 9, 2017 |access-date=January 28, 2021}}
In October 2018, the company began offering a well-being product in conjunction with American businesswoman Arianna Huffington's wellness company Thrive Global.{{cite web|url=https://techcrunch.com/2018/10/18/arianna-huffingtons-thrive-global-is-teaming-up-with-zenefits/ |title=Arianna Huffington's Thrive Global is teaming up with Zenefits |website=Techcrunch |date=October 18, 2018 |access-date=January 28, 2021}}
In April 2020, Zenefits laid off 15% of its staff due to the COVID-19 pandemic.{{cite web|url= https://www.bizjournals.com/sanfrancisco/c/zenefits-cuts-its-workforce-by-double-digits.html |title=Zenefits cuts its workforce by double digits |website=San Francisco Business Times|date=April 4, 2020 |access-date=January 28, 2021}}
In January 2021, the company launched a healthcare plan shopping feature on its platform.{{Cite web |date=2020-12-16 |title=Zenefits Launches Online Healthcare Shopping for Small Businesses |url=https://www.cpapracticeadvisor.com/2020/12/16/zenefits-launches-online-healthcare-shopping-for-small-businesses/41765/ |access-date=2024-10-22 |website=CPA Practice Advisor |language=en-GB}}
=Decline and acquisition=
In March 2021, the company entered a financing agreement with private equity firm Francisco Partners that gave the firm control of the company. Forbes reported that the company's value had declined significantly by that time.{{Cite web |last=Feldman |first=Amy |title=Zenefits, Once Worth $4.5 Billion, Does Deal With Private-Equity Firm That Gives It Control |url=https://www.forbes.com/sites/amyfeldman/2021/03/18/zenefits-once-worth-45-billion-does-deal-with-private-equity-firm-that-gives-it-control/ |access-date=2022-12-16 |website=Forbes |language=en}}
In February 2022, Zenefits was acquired by Francisco Partners-owned TriNet and was renamed to TriNet Zenefits.{{Cite press release |title=TriNet Completes Acquisition of Zenefits |url=https://www.zenefits.com/press-release/trinet-completes-acquisition-of-zenefits/ |access-date=2022-04-25 |website=Zenefits |language=en-US}}
Financials
Zenefits has been valued as high as $4.5 billion; it has received $583 million in venture-capital funding from investors such as Andreessen Horowitz, Brendan F. Wallace, Venrock, TPG, I.V.P., and Fidelity.{{cite web |last=Kossof |first=Maya |date=June 14, 2016 |title=Months After Banning Sex in the Stairwells, Zenefits Lays Off Another 106 Employees |url=http://www.vanityfair.com/news/2016/06/zenefits-lays-off-another-106-employees |access-date=December 6, 2016 |website=Vanity Fair}}
References
{{reflist}}
External links
- {{official website|https://www.zenefits.com/}}
Category:2013 establishments in California
Category:2022 mergers and acquisitions
Category:American companies established in 2013
Category:American corporate subsidiaries
Category:Business services companies of the United States
Category:Companies based in San Francisco
Category:Human resource management organizations
Category:Software companies based in California
Category:Software companies established in 2013