Root Inc. is laying off approximately 330 employees, or 20% of its workforce, in response to the impact of inflation on loss cost trends.
"As the pandemic has continued to evolve, touching every part of our economy, our company has been no exception," CEO Alex Timm said in a letter. "Supply chain and inflationary pressures have caused historic levels of loss cost increases."
The layoff is part of an organizational realignment that the auto insurtech implemented "to further drive efficiency and increased focus on the company's strategic priorities," according to a regulatory filing. Most job eliminations are effective in January.
The actions are expected to result in charges of approximately $7.0 million to $8.0 million for severance, benefits and related costs in the first quarter. Of these charges, approximately $4.0 million to $5.0 million could result in cash expenditures during the period.