The CEO of Zenefits, David Sacks, is leaving the company.
Sacks confirmed rumors Monday that he will be stepping down from his position. He is leaving after 10 months in a position that was vacated after company founder Parker Conrad resigned amidst reports that Zenefits was allowing unlicensed brokers to sell insurance.
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Sacks is not cutting all ties with the company, however. He will stay on as chairman, a role that he said in a memo to employees "will allow me to focus on what I do best — product and strategy — while working with a great operator who can help build our small business pipeline."
In his memo, Sacks did not make any mention of rumors that he will be joining the transition of President-elect Donald Trump in some capacity.
Reports have suggested that he plans to join his longtime friend, PayPal founder Peter Thiel, in helping out with the transition. Sacks also has declined questions from media about whether he plans to join the transition team.
Instead, the outgoing CEO framed his decision as the result of having largely completed the mission he set out to accomplish when he took over the beleaguered company in February. At the time, the company's fortunes looked bleak; its stock price had plummeted and it was facing criminal investigations in numerous states.
He noted that the company had settled legal disputes with 20 states over its legal transgressions. He highlighted the fact that California agreed to reduce the fine imposed on the company "in recognition of the remediation and cultural transformation that we accomplished."
The transition period has certainly been painful; Sacks laid off hundreds of workers. The startup's chief rival, ADP, gleefully responded by targeting many of the former Zenefits employees.
"Zenefits has an amazing team, hundreds of millions of dollars in the bank, and years of runway to keep building," he said near the end of the memo. "We are also the best All-in-One HR product for small businesses, a huge greenfield category. The company is spring-loaded for success, and I'm excited about partnering with a great operator to take Zenefits to the next level."
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