On Thursday, May 18, 2023, Insurtech Pie CEO, John Swigart, shared an important message with all “Pie-oneers.”
Swigart noted that as Dax and him shared with the team earlier, during their all-hands meeting, they’ve made “the very hard decision to reduce their headcount by about 14 percent, which will impact 66* Pie-oneers.”
This decision was “made as part of our wider budget revision process that they have undertaken over the last few months.”
As noted in a blog post, the workers leaving Pie will reportedly “receive a calendar invite by 12:30PM ET today for a 2:1 meeting today with a team leader and People Partner where they’ll walk through separation packages and answer any questions.”
A Slack message will be posted “confirming when all meeting invites have been sent so you will know if your role is being reduced.”
He added:
“I’m incredibly proud of what we’ve built together over the last six years, and what this amazing team has accomplished. I’m grateful and humbled by your commitment to fulfilling Pie’s mission of enabling small businesses to thrive. Unfortunately, our assessment of the current funding environment requires us to reduce our expenses and extend our runway to ensure we achieve profitability without additional investment.”
He further noted that Dax and him “take full responsibility for this decision and recognize the significant impact this will have on those who are leaving Pie today.”
According to the firm’s CEO, it’s painful and sad “to say goodbye to these talented Pie-oneers, and we want to emphasize that these decisions are not a reflection of the value of any individual employee or their contributions to Pie.”
As noted in a blog post:
“As has been widely reported in the news, the current economic outlook is filled with much uncertainty. During our first five years as a company, capital was readily available. As long as we hit our milestones, we were confident we could raise additional capital, and we did — Pie successfully raised funding from our Seed round through our Series C in March 2021. The funding environment began to deteriorate in late 2021 and continued to worsen as 2022 progressed.”
The update further noted:
“Because Pie had built such a strong business with an innovative product and sound fundamental metrics, we were able to raise our Series D in the midst of incredibly challenging conditions. Since we closed the Series D in September 2022, our outlook for future capital raises has been pushed out even further, which necessitates these expense reductions we’re implementing today.”
This February, in consultation with their board, they “decided to revise our three-year plan to ensure that we reach profitability with the cash we have on hand.”
Over the past three months, Pie’s leadership team “has been working on these revisions and ultimately identified over $25 million in annual expenses to eliminate from our budget.”
Without impacting their focus and investment in technology innovation, they first “looked at aggressively cutting non-headcount expenses, with more than half of our total reductions ultimately not staff related.”
Unfortunately, they could not achieve their overall target “without also making reductions to headcount.”
As mentioned in the announcement:
“Team members across the organization will be leaving Pie. Ultimately, decisions were based on the roles required to achieve our goals against the revised budget, not individual impact or performance. Exiting Pie-oneers will be receiving a comprehensive separation package including severance pay and health benefits. We’re also offering career placement and coaching services, and those leaving Pie will also keep all of their equipment.”
As confirmed in the update, today’s headcount reductions “are difficult but ultimately, we are making these tough decisions to ensure our future success, and so we can continue to serve the small business owners and partner agents across the country who deserve a better insurance experience.”
The firm added:
“We recognize that tomorrow there will be 14 percent fewer people at Pie to work on accomplishing our objectives. However, we are making this decision to maximize our financial control, maintain our strong financial position, and ensure we reach profitability with the cash we have on hand. With this decision, we will tighten our focus and restructure a number of teams to ensure that our highest priority objectives are achieved. We will provide much more detail on these changes over the coming days and weeks.”
The firm concluded:
“We recognize this is difficult news to hear, but it is during these challenging moments that acting according to our Values and Operating Principles is most important. We’ve strived to do this in the Pie way with integrity and ownership, which is why we’ve shared this news with all of you at once, and why every impacted pie-oneer will be having a 2:1 conversation with a leader and People Partner. When environments and circumstances change, we’re compelled to make hard decisions, and today is one of those days for Pie. To Pie-oneers who are leaving us today, we sincerely thank you for all your contributions to Pie. We’re grateful and are here to support you however we can.”