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Root Insurance
January 20, 2022
June 14, 2024

Root Insurance Layoffs: What Happened & Why?

In January 2022, Root Insurance, a notable player in the insurtech space, announced the layoff of 330 employees. The company's inside sales unit faced a 75% reduction, and the claims department was "deactivated." These layoffs were attributed to the impact of COVID on sales, prompting Root to realign its business strategy. In this article, we'll discuss what happened, why it occurred, and the potential future impact on the company and the industry.

Why did Root Insurance have layoffs?

Root Insurance's decision to lay off 330 employees was primarily driven by the impact of COVID on sales, necessitating a realignment of the company's business strategy. The inside sales unit faced a 75% reduction, while the claims department was "deactivated." A Glassdoor review suggested that the inside sales unit was "overstaffed" and undergoing changes, further supporting the need for internal restructuring.

Root's layoffs can be seen as a response to the challenging business environment brought on by the pandemic. The company has been pursuing independent agents and partnering with Goosehead Insurance, indicating a shift in its approach to the market. Root's PR team emphasized that the remaining claims and inside sales teams are well-equipped to serve current customers and marketing goals.

Financial Impact and Future Directions

The realignment is aimed at driving efficiency and increased focus on the company's strategic priorities, according to CEO Alex Timm. The layoffs may result in cost savings and improved operational efficiency in the short term, but the long-term financial health of the company remains uncertain.

Post-layoffs, Root Insurance is expected to concentrate on its strategic priorities, although no specific products or markets have been mentioned. This focus is intended to position the company for future success and adapt to the changing business environment.

Impact on Industry

Root Insurance's recent layoffs may have short-term effects on the Finance industry, as other companies may need to adapt to the changing landscape and reassess their staffing needs. The effects of Root's layoffs on the Finance industry will depend on how the company and its competitors adapt to the new business environment and whether they can successfully realign their strategies for future growth.


Root Insurance laid off 330 employees due to COVID's impact on sales, leading to a realignment of their business strategy. The company now aims to focus on strategic priorities for future success. These layoffs may affect Root's standing in the industry and prompt other companies to reassess their staffing needs. The broader market could experience shifts as businesses adapt to the new environment, and Root's future actions will likely be influenced by the outcomes of this workforce reduction.