The CEO of troubled $2 billion startup Zenefits is leaving, less than a year after taking over
Zenefits, the $2 billion HR software maker, is in the process of looking for a new CEO to replace David Sacks, who took over the helm less than a year ago, Sacks told The New York Times.
“It’s time to find the next leader,” Sacks told The Times. He will remain with the company as its chairman.
The news was reported earlier by The Information, and The Wall Street Journal said that Sacks is considering taking a job with the presidential transition team of Donald Trump. Sacks is a friend and former colleague of Silicon Valley venture capitalist and PayPal founder Peter Thiel, who is helping to lead Trump's transition team.
Sacks could take on another role like senior executive chairman at the company, the report said.
The news comes as a bit of a surprise. Sacks just took the CEO position in February after founder/ex-CEO Parker Conrad was found to be responsible for developing illegal training software.
The company has been involved in a number of legal issues throughout the year, but seems to have settled down a bit after launching a new version of its product called "Z2" in October.
Sacks published a series of tweets on changes at the company late Friday night, saying he did not want the CEO job, but "felt a responsibility to investors, employees and customers to help the company through the crisis."
Read Sacks' tweets here:
1/ Ten months ago, the Board asked me to step into the CEO role at Zenefits amidst a regulatory crisis.
— David Sacks (@DavidSacks) December 3, 2016
2/ This is not a job I sought, but I felt a responsibility to investors, employees and customers to help the company through the crisis.
— David Sacks (@DavidSacks) December 3, 2016
3/ I accepted no compensation to do this job. (I wanted employees to get it all -- we more than doubled their ownership.)
— David Sacks (@DavidSacks) December 3, 2016
4/ This week we successfully resolved the issues with the California Department of Insurance (CDI), our lead regulator, and 19 other states.
— David Sacks (@DavidSacks) December 3, 2016
5/ Remarkably CDI reduced its fine 50% in recognition of the remediation and cultural transformation we’ve done.
— David Sacks (@DavidSacks) December 3, 2016
6/ Regulators across the country have praised the company for resetting its values, culture, mission, leadership, and governance.
— David Sacks (@DavidSacks) December 3, 2016
7/ As a result, the company now has a clean bill of health.
— David Sacks (@DavidSacks) December 3, 2016
8/ Meanwhile, our amazing employees kept working. We launched our new Z2 product that small businesses love.
— David Sacks (@DavidSacks) December 3, 2016
9/ We reset our relationship with investors. We reduced headcount 35% and lowered monthly burn 50% YoY.
— David Sacks (@DavidSacks) December 3, 2016
10/ We refocused on our core small business market. We’ve seen renewed growth on the heels of Z2. Sales is hiring again.
— David Sacks (@DavidSacks) December 3, 2016
11/ In short, we've achieved every goal set forth in my Day 1 memo, which outlined the turn-around plan.
— David Sacks (@DavidSacks) December 3, 2016
12/ Now it is time to open a search for permanent CEO of the company. I will stay involved as Chairman, focusing on product and strategy.
— David Sacks (@DavidSacks) December 3, 2016
13/ Zenefits has a great team, hundreds of millions of dollars in the bank, and years of runway to keep building.
— David Sacks (@DavidSacks) December 3, 2016
14/ Z2 is also the best product in a huge greenfield category -- small business HR. With this, Zenefits is spring-loaded for success.
— David Sacks (@DavidSacks) December 3, 2016
15/ I cannot thank all of our employees enough for their hard work to turn the company around. Their decisions and actions made it happen.
— David Sacks (@DavidSacks) December 3, 2016
16/ I’m excited about the future of Zenefits and partnering with a great operator and our Board to take Zenefits to the next level. //
— David Sacks (@DavidSacks) December 3, 2016
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