Shortly after its acquisition of car insurer Metromile, Lemonade reportedly laid off about 20% of the Metromile staff.
According to a report by Forbes, 60 Metromile employees were laid off just hours after Lemonade closed the $145m deal.
A former Metromile employee told Forbes, “For most folks, it came as a surprise…During the process of the merger, it was generally understood that everyone would have a role at Lemonade.”
Lemonade first entered into an agreement to acquire the company towards the end of 2021, with completion being announced last week.
A Lemonade spokesperson said in a statement, “We’re thrilled that we’ve finalized our acquisition of Metromile, and that we’ve been able to offer a role at Lemonade to about 80% of the Metromile team.
“The combined entity is better than the sum of its parts, and can operate with fewer people than were needed to staff the two standalone. This makes the deal compelling to shareholders, but clearly is painful to those who weren’t extended an offer to join Lemonade.”
This would not be the first time the deal has caused controversy. Not long after the deal was first announced, global investor rights law firm Halper Sadeh launched an investigation into whether the sale of Metromile would be fair to its shareholders, over concerns whether Metromile and its board of directors violated federal security laws or breached their fiduciary duties to shareholders.
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