Bench, the accounting and tax services startup rescued from collapse last year, has now confirmed a fresh wave of significant layoffs. While the company declined to disclose exact numbers, sources said that dozens of roles were eliminated—impacting a major portion of Bench’s roughly 300-person team.
The departments most affected included client success and tax services. According to one insider, nearly the entire U.S.-based tax advisory staff was let go. The cuts follow Bench’s acquisition by Employer.com, a San Francisco-based HR tech firm, which bought the struggling startup in December 2023 for $9 million.
“We deeply appreciate the contributions of our employees,” said Matt Charney, CMO at Employer.com. “This decision was not made lightly.”
Turmoil After Restructuring and Missed Tax Deadlines
Bench once raised over $110 million in venture capital and an additional $50 million in debt but failed to reach profitability. The startup’s cash burn forced it to shut down abruptly last year, laying off its entire staff and leaving many clients in limbo. The fire sale acquisition by Employer.com saved Bench from total collapse, with most of the team re-hired under new management.
However, former and current employees revealed that many of those rehires came with strings attached. Rather than bringing them on as full-time staff, Bench has been retaining most of its workforce as independent contractors. Their contracts, reportedly just 30 days long, are renewed monthly—a temporary approach the company said it used to onboard quickly after the acquisition.
Compounding the uncertainty, insiders said that Bench informed employees it plans to shift most of its workforce outside of North America. Still, Charney insisted that the layoffs weren’t driven by outsourcing. “This is about turning around the business and addressing legacy issues,” he said
Beyond internal restructuring, Bench has also faced major customer retention issues. Employees said many clients churned after the April 15 tax deadline. Several customers were frustrated that their taxes were either delayed or not completed. One source claimed Bench failed to deliver on time for a large portion of users.
There have also been complaints from clients who claimed they were billed twice—once by the old company and again under new ownership. In response, Bench stated it honors all previously paid services.
Churn, Legacy Pricing, and What’s Next for Bench
Charney acknowledged the uptick in customer churn but said it was partly intentional. The company needed to move away from unprofitable accounts that were set up under outdated pricing models. “Over time, legacy pricing and servicing decisions made before our acquisition of Bench led to a subset of customers being supported at a loss,” he said.
Despite the layoffs and shrinking customer base, Bench says it still plans to grow. According to Charney, the company intends to expand both its feature set and workforce in the future. But it remains to be seen whether Bench can rebuild trust among customers and employees who’ve weathered months of uncertainty.
While the company has survived its initial collapse, its future now depends on its ability to balance recovery with stability. For now, the recent Bench layoffs serve as another reminder of how hard it is to revive a once high-flying startup.
