$1.47 billion identity startup ID.me, which closed deals with unemployment agencies and the IRS, lay
- Identity verification company ID.me announced layoffs to staff Tuesday.
- CEO Blake Hall said in an email to staff that the layoffs were due to market volatility.
- ID.me grew rapidly during the pandemic, hiring nearly 1,500 people and winning contracts with the IRS and state unemployment agencies.
ID.me, an identity verification company that has done work for the Internal Revenue Service, Department of Veterans Affairs, and dozens of state unemployment agencies, said it would be laying off staff on Tuesday, Insider has learned.
In an email to staff, CEO Blake Hall said the job cuts were because of a volatile economy and push for profitability.
"While ID.me has experienced tremendous growth, we are not immune from the difficult market conditions that have negatively affected the tech industry," Hall said in the email, which was obtained by Insider. "To remain in control of our future, we must reorient the business around core products and establish an organic path to profitability."
Hall said that affected employees would get an invitation to join a meeting within 30 minutes of his email, informing them of the layoff. Remaining employees were invited to join a town hall meeting that afternoon. A current employee who attended the town hall told Insider that Hall did not answer any questions from employees during the meeting.
In a statement to Insider, the company's outside spokesperson, Patrick Dorton, declined to comment on how many employees were affected by the layoffs but claimed they only affected corporate employees, and not any of the customer support staff, known internally as Trusted Referees. According to seven current and former employees, the layoffs affected some customer service managers, senior members of the support team, and quality assurance auditors.
"With economic headwinds beginning to be felt across many industries, as good stewards of our company we must position ID.me for long-term success," Dorton said. "ID.me is committed to investing its resources wisely to ensure its customers continue to be properly served."
ID.me has grown rapidly since 2020, hiring nearly 1,500 employees and winning dozens of lucrative contracts with state unemployment agencies, the Social Security Administration, and the IRS in less than two years, Insider previously reported. In that time, it expanded its real-estate footprint and opened a new office in Tampa, Florida, in addition to its headquarters in McLean, Virginia.
The company closed its most recent venture funding round, a $100 million Series C led by Viking Global Investors, in March 2021, valuing the company at $1.47 billion. It took on an additional $100 million in debt financing from Fortress Investment Group in September, according to PitchBook.
ID.me's most profitable products, according to one person who spoke on condition of anonymity to discuss company financials, are its discount programs for veterans, nurses, doctors, and first responders. These workers qualify for a discount at major retailers and restaurants after verifying their identity and work status on ID.me.
As reported in an Insider investigation, customer service workers hired during ID.me's rapid expansion described long helpline queues, user-data security lapses, and insufficient training to do their jobs or protect their mental health.
People who had difficulty getting verified on ID.me could get locked out of their unemployment benefits or IRS child tax credit money. Hundreds of veterans lodged complaints to VA helplines that they had been barred access to healthcare, housing, and education benefits because of issues with ID.me, Insider previously reported.
Employees who lost their jobs on Tuesday were told they would receive a severance package of up to four months of pay followed by two months of paid COBRA health coverage, according to two people.
One of these people said that ID.me's leadership had asked employees earlier this year to tabulate the work their teams were doing, including estimates of time spent and the fiscal impact of individual employees' work. The company's chief financial officer, Stephen Benedict, and VP of engineering, Alexei Czeskis, assured employees that this assignment was not an indication of coming layoffs, this person said..
"It seems that last part was not true," they said.
Read CEO Blake Hall's full email to staff below.
Team,
This is a difficult note to send. Since starting this company, ID.me has worked to increase access, security, and privacy and digital transactions. Today ID.me's vision to empower people to control their own data — online and off-line — has never been more important. Along the way, my commitment has been to do what is best for ID.me's customers, employees, and users.
While ID.me has experienced tremendous growth, we are not immune from the difficult market conditions that have negatively impacted the tech industry. To remain in control of our future, we must reorient the business around core products and establish an organic path to profitability. The long-term success of ID.me and our mission depends on making painful but necessary changes.
Unfortunately, these changes include reducing the size of our workforce and parting ways with all your teammates. I understand this is a very tough moment for those impacted and for our entire team. By acting now, we are able to provide those who are impacted with generous severance packages.
In the next 30 minutes, executives will reach out to set up meetings with team members who are being affected by the reduction in force. We plan to have all those affected by these changes to be informed by one p.m. Eastern Standard Time today. There will be an opportunity to come together as a team at our all dash hands town hall later this afternoon to discuss this news and the future of our company.I want to thank each of you for your contributions that have made ID.me what it is today. That foundation will enable us to have an even greater impact tomorrow.
Sincerely yours,
Blake
Are you a current or former ID.me employee? Know something we missed? Contact this reporter via email at chaskins@businessinsider.com or caroline.haskins@protonmail.com, or through secure messaging app Signal at +1 (785) 813-1084. Check out Insider's source guide for suggestions on how to share information securely.
This article has been updated to reflect the fact that the layoffs also affected some customer service mangers, senior members of the support team, and quality assurance auditors.
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