Root Insurance is laying off approximately 20% of its workforce due to rising inflation costs and other pandemic challenges.
According to the Columbus-based auto insurer, approximately 330 employees would be affected. The majority of the affected employees were notified on Thursday, with the majority of job cuts taking place before the end of the month.
The company cited supply chain and inflationary pressures as pandemic-related challenges.
As the pandemic has continued to evolve, touching every part of our economy, our company has been no exception,” Alex Timm, Co-Founder and CEO of Root, said in a letter. “Supply chain and inflationary pressures have caused historic levels of loss cost increases.”
Root Insurance stated in a regulatory filing that the majority of the savings are the result of optimizing the claims and sales departments.
According to the SEC filing, Root anticipates recording charges of approximately $7 million to $8 million for severance, benefits, and related costs as a result of the layoffs, with approximately $4 million to $5 million of these charges expected to result in cash expenditures in the first quarter of 2022.
Timm stated that those affected will receive financial and career placement assistance.