As benefits management startup Zenefits tries to regroup after a series of legal and financial setbacks has left it in disarray, its chief competitor is gleefully seizing an opportunity to strengthen its position in the world of HR services.
Roseland, New Jersey-based ADP has been recruiting those recently let go by Zenefits, which last year sparred with the 67-year-old company in court and through bombastic blog posts after ADP temporarily blocked Zenefits from accessing payroll data for shared clients. Zenefits does not provide its own payroll services, but helps companies that use other payroll providers, such as ADP, integrate that service with its benefit management platform.
Buzzfeed reports that Zenefits employees began receiving messages from ADP recruiters within hours of an announcement from the startup that it would lay off 106 workers, or roughly 9 percent of its staff. ADP will be conducting a round of hiring interviews directed solely at former Zenefits employees, the company said.
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Many of the laid-off employees are coming from the Arizona branch that Zenefits is downsizing as part of a reorganization in which it concentrates all of its sales personnel at its headquarters in San Francisco.
"We were very sorry to hear the news regarding the layoffs at Zenefits today," said the message from an ADP recruiter. "I wanted to reach out to let you know that ADP are actively hiring for sales staff in the Phoenix area and will be holding interview days this week and next week, exclusively for Zenefits employees affected by the office closure."
During last year's conflict, Zenefits officials cast ADP as a grumpy old company unwilling to adapt to the new technological landscape. ADP in turn framed Zenefits as an irresponsible and untrustworthy actor.
The abrupt resignation in February of Zenefits CEO Parker Conrad in the midst of lower-than-expected revenue as well as questions about the company's legal compliance after Buzzfeed reported that it was allowing unlicensed brokers to sell health insurance on its behalf.
The scandal likely served as a delicious vindication for ADP.
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