Charleston-based Benefitfocus is laying off 17% of its U.S. workforce, a total of 250 employees, citing the impact that COVID-19 is having on its business.
CFO Stephen Swad said in a news release that although the first two months of the year started strong, first-quarter revenue is expected to fall short of the company’s previous quarterly guidance, primarily because of lower-than-expected professional services revenue.
Swad said Benefitfocus is ending the first quarter with a cash balance of $115 million, with revenue about $1.5 million short of the company’s projection. The company used about $11 million of free cash flow in the first quarter.
In addition to the layoffs, President and CEO Ray August is taking no pay and the rest of the executive team has taken a 20% salary reduction. All raises and promotions have been suspended, as has hiring for all noncritical positions. The company’s 401(k) match has also been suspended.
Benefitfocus has headquarters on Daniel Island and offices in Greenville, Oklahoma and Wisconsin. The company is expected to provide more detail on its first-quarter performance in its earnings call Wednesday.
“The COVID-19 pandemic has had an unprecedented impact on our global economy,” August said in the release. “We are taking decisive actions to maintain Benefitfocus’ financial strength during a prolonged period of uncertainty so we can continue to advance our mission of improving lives with benefits.”