Hippo fires 10% of employees in surprise layoff; COO/CTO exits with 6M pay

Homeowners insurtech  Hippo has revealed that it would be laying off 10% of its workforce, including chief operating officer and chief technology officer of the company, in a move to “drive efficiency and increase focus on strategic priorities” amid tough market conditions.

On August 31, 2022, the company instituted an organisational realignment, including an “involuntary workforce reduction” affecting approximately 70 employees, which represents approximately 10% of its workforce.

As a result of this, the company's chief operating officer and chief technology officer Ran Harpaz will depart from his position effective November 15, 2022. Harpaz will be eligible for separation benefits based on his termination consisting of $250,000, which equals six months of his base salary.

Hippo said the majority of the affected employees have been notified on August 31, with most job eliminations taking effect on September 1.

The company expects to record charges of approximately $1.8 million to $2.0 million for severance, benefits, and related costs as a result of these actions in the third quarter of 2022, of which approximately $1.2 million to $1.4 million are expected to result in cash expenditures in the same period.

Hippo noted that it is continuing to review the potential impact of the reduction, including facility lease exits and additional employee related costs, but is unable to estimate any additional restructuring costs or charges at this time.

If the company subsequently determines that it will incur additional material restructuring costs or charges, it will amend this Current Report on Form 8-K with respect to such determination.

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