Zenefits continued its housecleaning on Tuesday, announcing plans to eliminate more than 100 jobs and close its sales operation in Arizona, according to an internal memo from CEO David Sacks.
The 106 job cuts equate to about 9 percent of company head count, Sacks said, and all of Zenefits' sales and marketing efforts will be relocated from Arizona to San Francisco. The company is also offering to pay employees to quit.
"This is a painful decision," Sacks wrote in a memo obtained by CNBC. "But it is the right thing to do."
In the original memo, Zenefits said it was closing its office in Arizona, but later corrected the statement to say that it's phasing out its sales operation there. The office will remain open with about 350 employees, the company said.
Zenefits provides free software to help small businesses manage their own human resources, and the San Francisco-based start-up was valued at $4.5 billion in its latest round of funding. The company makes a profit as an insurance broker by selling health insurance to its business partners.
Sacks took over Zenefits in February, after co-founder and former CEO Parker Conrad was forced to resign. Conrad was found to have encouraged salespeople to skirt licensing laws, while also promoting a frat-like culture in the office. Zenefits was a poster-child for Silicon Valley's growth-at-all-costs ethos of recent years. Sacks fired 250 employees soon after becoming CEO.