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Wefox CEO ‘disgusted’ by mass tech layoffs: ‘These are humans’

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Wefox CEO Julian Teicke.

Wefox

HELSINKI, Finland — The boss of European digital insurance startup Wefox offered a damning response to tech companies that have laid off workers en masse.

The likes of Meta, Amazon and Twitter have laid off tens of thousands of employees in response to pressure from investors, who want to see them cut costs to weather a global economic downturn.

Swedish fintech firm Klarna was among the first major employers in tech to slash jobs this year, cutting 10% of its workforce in May. Several companies have followed suit, from those in Big Tech to venture-backed startups like Stripe.

Julian Teicke, CEO of Wefox, told CNBC he is “disgusted” by what he views as a disregard by some of his peers for their employees.

“I’m a little disgusted by statements like, ‘never miss a good crisis’ [or] ‘we have to cut the fat,'” Teicke said in an interview on the sidelines of Slush, a startup conference in Helsinki, Finland.

Venture capitalists have been advising startups in their portfolios to cut costs and freeze hiring as economists warn of an impending recession.

Following a bumper 2021 full of IPOs and mega funding rounds, some of the most valuable startups in Europe laid off significant numbers of staff and drastically scaled back their expansion plans.

At the start of Slush on Thursday, Sequoia Capital partner Doug Leone told founders and investors they should embrace opportunities brought by challenges in the broader economy.

Forecasting a prolonged recession worse than the 2008 or 2000 crises, Leone said some companies will emerge stronger than others. 

“You have a great opportunity in front of you, if you play your cards right,” he said. “You have an opportunity to pass 10 cars. Do not waste a good recession.”

In some eyebrow-raising comments, Sebastian Siemiatkowski, CEO of Klarna, said his firm was “lucky” to cut jobs when it did. Siemiatkowski said that roughly 90% of the people laid off had since found new jobs.

“If we would have done that today, that probably unfortunately would not have been the case,” Siemiatkowski told CNBC in an interview.

Without naming names, Teicke slammed the tech industry over its approach to mass redundancies.

“These are people that have maybe quit other jobs to join your business. These are people that have maybe moved to other places because of you. These are people that have maybe ended romantic relationships.”

Teicke said managers have a responsibility to protect their employees.

“I believe that CEOs have to do everything in their power to protect their employees,” he said. “I haven’t seen that in the tech industry. And I’m disgusted by that.”

“These are humans,” he added.

Wefox is a Berlin, Germany-based firm that connects users seeking insurance with brokers and partner insurers through an online platform. The company was valued by investors at $4.5 billion in a July funding round.

Wefox says its business is “crisis-resistant.” But fellow insurtechs have had to make cuts lately, including Lemonade, which shed 20% of staff at Metromile, a car insurance company it acquired, in July.

Asked whether his own firm would have to make redundancies in response to shifting investor sentiment, Teicke said his firm was “cautious” about the macroeconomic environment but had no plans for mass layoffs.

“I don’t believe in mass layoffs,” Teicke said. “We’re going to focus on performance, but not on mass layoffs.” Wefox is “very close” to achieving profitability next year, he added.

Wefox founder explains the opportunity in digital insurance industry

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Payrolls and wages blow past expectations and flying in the face of Fed rate hikes

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An employee works at the BMW manufacturing plant in Greer, South Carolina, October 19, 2022.

Bob Strong | Reuters

Job growth was much better than expected in November despite the Federal Reserve’s aggressive efforts to slow the labor market and tackle inflation.

Nonfarm payrolls increased 263,000 for the month while the unemployment rate was 3.7%, the Labor Department reported Friday. Economists surveyed by Dow Jones had been looking for an increase of 200,000 on the payrolls number and 3.7% for the jobless rate.

The monthly gain was a slight decrease from October’s upwardly revised 284,000.

The numbers likely will do little to slow a Fed that has been raising interest rates steadily this year to bring down inflation still running near its highest level in more than 40 years.

In another blow to the Fed’s anti-inflation efforts, average hourly earnings jumped 0.6% for the month, double the Dow Jones estimate. Wages were up 5.1% on a year-over-year basis, also well above the 4.6% expectation.

Futures tied to the Dow Jones Industrial Average plunged following the report, falling more than 400 points as the hot jobs report could make the Fed even more aggressive.

This is breaking news. Please check back here for updates.

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Four Ways to Save Money on Home Insurance as Rates Rise

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Homeowners had to shell out more money for mortgage payments, routine maintenance and heating costs this year as quickening inflation and rising interest rates strained monthly budgets. One more bigger bill to add to that list: home insurance.

Home insurance premium rates rose 9.3% from Jan. 1, 2021, through Nov. 25 on average nationwide, according to S&P Global Market Intelligence data. The Insurance Information Institute, an industry trade group, also known as Triple-I, said premiums are likely to rise further in 2023.

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Here’s how much the typical baby boomer has saved for retirement — how do you stack up right now?

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Here’s how much the typical baby boomer has saved for retirement — how do you stack up right now?

The 71.6 million men and women of the postwar baby-boom generation started hitting retirement age eight years ago. But it’ll be another dozen years before the whole generation has reached its full retirement age.

So just how is retirement shaping up for the generation that went from Woodstock and Watergate to iPhones and Instagram?

A new survey from the Transamerica Center for Retirement Studies estimates that the median retirement savings of boomers totals $202,000. That might sound like a respectable amount of cash, but that produces just $8,080 a year, or $673 a month.

In many cases, that money gets nibbled away by income tax, too. With that in mind, here are three proven strategies baby boomers might want to seriously consider to bolster their retirement nest eggs.

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Work longer and delay Social Security

Working longer not only delays taking money out of your retirement investments, which allows them to continue compounding earnings growth, but it also pushes back the age at which you’ll need to start collecting Social Security payments.

Take that $202,000 investment portfolio. Invested in a conservative portfolio returning 5% annually — the historical average return on stocks is 11.9% — that money would grow to $233,840 in three years. Assuming you’re following the 4% rule for withdrawals, that would amount to $9,354 per year — an increase of $1,274 each year.

As for Social Security, delaying retirement until after you reach your full retirement age increases the monthly benefit by 8% a year, until payments max out at age 70.

A Boomer born in 1955 would reach full retirement age of 66 years and 2 months in 2022, with an average Social Security benefit of $1,668 per month as of spring 2022. Delaying benefits for three years would see that amount increase 124% to $2,068 — translating into an extra $400 per month.

Add that to the increased payout from allowing your investments to grow, and that three-year delay before retiring adds $506 of income per month, or another $6,074 per year.

Find a “returnship” opportunity

Working part-time in retirement is another way to augment your investments. In fact, an increasing number of firms are encouraging older workers to cut back to part-time rather than retire entirely, and many companies are offering “returnships” for older workers who want to transition to a new field or type of job.

Read more: Trade up while the market is down: Here are the best investing apps to pounce on ‘once-in-a-generation’ opportunities (even if you’re a beginner)

The part-time work doesn’t have to be especially high-paying either. Working 15 hours a week at the current federal minimum wage of $7.25 would net you roughly $5,100 a year before taxes.

Sure, that doesn’t seem like much, but apply the 4% rule and that $5,100 of income is equal to adding about $128,000 to your investment portfolio.

Cut your expenses

Finding ways to lower your expenses in retirement produces a big bang for each buck, because you’re saving after-tax money. Try to look for recurring monthly expenses you can cut because that’ll mean you see those savings every month.

Other savings opportunities include paying off a mortgage or other debt before you retire, downsizing your home, traveling in the off-season, taking advantage of seniors’ discounts, comparison shopping for insurance or going from a two-car household to one car.

Max out your retirement accounts

When it comes to Individual Retirement Accounts (IRAs), anyone older than 50 can add $1,000 in “catch-up” contributions each year to a regular IRA or a Roth IRA, on top of the $6,000 per year general limit.

You need to be earning at least as much as you contribute to add to an IRA, and the annual contribution limit applies to all your combined IRAs.

If you’ve still got access to a pre-tax workplace retirement account, such as a 401(k), 403(b) or 457 Plan, you can contribute up to $20,500 a year — unless your plan sets a lower cap. In many cases, employers match set amounts of your contributions, which is about as close as you’ll get to free money.

Get expert financial advice

Even after following all of the above advice, setting yourself up for a comfortable retirement is nerve-wracking — especially with an 7.7% inflation rate and potential recession peeking around the corner.

According to the Federal Reserve, only 36% of non-retirees thought their retirement savings were on track as of 2021. One solution is to find a financial adviser who can help you navigate your finances and make sure your assets are safeguarded.

Researching and calling multiple financial planners can be a time-consuming hassle, but there are ways you can easily browse vetted advisers that fit your needs. Booking a consultation is free and only takes a few minutes.

If you’re unsure of how to safeguard your savings during a recession, the time to find a financial adviser is now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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