Wefox CEO Julian Teicke.
HELSINKI, Finland – The boss of European digital insurance startup Wefox delivered a scathing response to technology companies that have been laying off workers en masse.
The will of meta, Amazon and Twitter laid off tens of thousands of employees in response to pressure from investors, who want them to cut costs to weather a global economic downturn.
Swedish fintech company Klarna was one of the first major employers in the technology sector to cut jobs this year, cutting 10% of its workforce in May. Several companies have followed suit, from Big Tech companies to venture-backed startups like Stripe.
Julian Teicke, CEO of Wefox, told CNBC he is “disgusted” by what he perceives as contempt by some of his colleagues for their employees.
“I’m a bit disgusted with statements like ‘never miss a good crisis’ [or] ‘we need to cut the fat,'” Teicke said in an interview on the sidelines of Slush, a startup conference in Helsinki, Finland.
Venture capitalists have advised startups in their portfolios to cut costs and freeze hiring as economists warn of an impending recession.
After a stellar 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 Slush’s launch on Thursday, Sequoia Capital partner Doug Leone told founders and investors to seize opportunities presented by challenges in the wider economy.
Leone predicted a prolonged recession, worse than the 2008 or 2000 crisis, saying some companies will come out 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 comments, Klarna CEO Sebastian Siemiatkowski said his company was “lucky” when it cut jobs. Siemiatkowski said about 90% of those laid off had since found a new job.
“If we had done that today, unfortunately it probably wouldn’t have happened,” Siemiatkowski told CNBC in an interview.
Without naming names, Teicke slammed the technology industry for its approach to mass layoffs.
“These are people who may have quit other jobs to join your company. 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 they can to protect their employees,” he said. “I haven’t seen that in the tech industry. And it disgusts me.”
“These are people,” he added.
Wefox is a Berlin, Germany based company that connects users looking for insurance with brokers and partner insurers through an online platform. The company was valued at $4.5 billion by investors in a funding round in July.
Wefox says its company is “crisis-proof.” But fellow insurance techs have had to cut back recently, including Lemonade, which in July cut 20% of its workforce at Metromile, an auto insurance company it acquired.
Asked if his own company should make layoffs in response to shifting investor sentiment, Teicke said his company was “cautious” about the macroeconomic environment but had no plans for mass layoffs.
“I don’t believe in mass layoffs,” Teicke said. “We’re going to focus on performance, but not mass layoffs.” Wefox is “very close” to reaching profitability next year, he added.