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Unicorn startup Zenefits nearly halves its staff with layoffs

The rising star, once valued at $4.5 billion, is rapidly losing its shine, with 430 staffers cut from the company.

Zenefits has laid off nearly half of its staff.

The unicorn might not be so magical after all.

Zenefits, a startup designed to manage human resources, is having an HR nightmare of its own after laying off about 430 workers, a development first reported by BuzzFeed News. That's about 45 percent of its payroll, leaving only about 500 staffers in the wake.

The layoffs come in an effort to cut costs. The startup called the layoffs a "hard but necessary decision" for its long-term growth.

Zenefits is losing 250 employees from its San Francisco headquarters and about 150 workers from its Arizona branch. The company will be focusing on its product and engineering teams in Vancouver and Bangalore, and working on its operations organization from Arizona.

The massive layoffs come just three days after Zenefits named Jay Fulcher as its new chairman and CEO.

"Today's actions have been planned for some time by the Board, the prior CEO David Sacks, and the executive team, to put our new CEO Jay Fulcher and the organization as a whole in the best position for long-term success," a company spokesperson said.

The company is engaged in a "turnaround program" to shift its reputation and reset its culture and values, according to the spokesperson.

Zenefits had attracted notice around Silicon Valley after catapulting to a $4.5 billion valuation in just two years. But the fall came even faster than the rise, with its valuation dropping to $2 billion in 2016.

It's been tough sledding for Zenefits since a scandal involving co-founder Parker Conrad, who was accused of helping employees skirt the law and who was later forced to resign. The company also infamously had to send out a memo to ban having sex on the stairs at the office.

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