Summary:
Bench's sudden shutdown on December 27 left thousands of small businesses in chaos.
Immediate layoffs affected hundreds of employees with no severance.
The company's automation struggles led to significant delays and customer churn.
Leadership turmoil contributed to Bench's operational difficulties and eventual shutdown.
A surprising acquisition by Employer.com aims to revive the company and save jobs.
A Chaotic Holiday for Small Businesses
Friday, December 27, was meant to be a relaxing start to the holiday weekend, but it turned into chaos for thousands of small business owners using Bench, a Canadian accounting startup that had raised $113 million from investors like Bain Capital Ventures and Shopify. Customers found themselves unable to log into their accounts just as tax season began, with Bench's entire website offline, announcing its sudden shutdown after 13 years of operation.
Immediate Layoffs
Bench's staff faced immediate layoffs without severance or notice. Affected employees reported that they learned about the shutdown through media inquiries, highlighting the shock of the situation.
Automation Challenges
Bench marketed itself as a tech-forward bookkeeping solution but struggled with automation. Many staff members noted that while automation in theory simplifies tasks like categorizing expenses, the execution was flawed. This reliance on automated tools led to delays in service, pushing some customers away, with reports of clients still waiting for their 2023 books well into September 2024.
Turmoil in Leadership
The company's troubles were exacerbated by executive turmoil. After the departure of co-founder and first CEO Ian Crosby in 2021, who cited board pressure, the company saw a series of leadership changes. The focus shifted towards profitability and automation under his successors, but these strategies failed amidst ongoing customer churn and declining investor interest.
A Sudden Shutdown
On December 27, Bench abruptly ceased operations. The shutdown was reportedly triggered by a bank calling in its venture debt, despite ongoing sales up to that day. This unexpected closure drew media attention, which ultimately led to a potential revival.
An Unlikely Revival
After the shutdown, Jesse Tinsley, CEO of Employer.com, saw the news and initiated a quick acquisition deal. Within 36 hours, Employer.com announced its plans to acquire Bench, aiming to save jobs and maintain customer service.
Uncertainties Ahead
While Employer.com promised to rehire many former Bench employees and honor customer contracts, uncertainties linger about Bench’s long-term sustainability. The rapid acquisition raised questions about service quality and the ability to navigate the complexities of accounting, given Employer.com's lack of experience in the field. Despite these challenges, the new leadership expressed confidence in Bench's reputation and potential for recovery.
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