Bench, the accounting and tax startup that was bought in a fire sale last December, has conducted a round of significant layoffs, it confirmed to TechCrunch.

Bench didn’t specify how many people were affected, but one person who works there estimated that Bench was eliminating dozens of positions – that’s a big chunk of the around 300 people who work for the company.

Departments like client success and tax services were directly impacted, with one person directly familiar with the matter telling TechCrunch that most of Bench’s U.S.-based tax advisory team was eliminated. 

Employer.com, the San Francisco HR tech company that bought Bench last year, told TechCrunch the decision to make the cuts “was not made lightly.”

“We deeply appreciate the contributions of our employees who have worked diligently to maintain these accounts,” Employer.com CMO Matt Charney said. 

Under previous ownership, Bench raised over $110 million in VC funding and over $50 million in debt, but never reached profitability. The company burned through its cash and abruptly shut down, laying off its entire staff and leaving thousands of customers without access to their books. Employer.com then swooped in, buying Bench for $9 million, re-hiring most of the startup’s workforce, and pledging to revive the startup.

The move saved Bench from total collapse. 

But two current Bench workers and a former one told TechCrunch that Bench has kept most of its workforce on as independent contractors, renewing their 30 day contracts every month instead of hiring them as full-time employees. At the time of the sale, Employer.com said this was a temporary measure.

These people also told TechCrunch that Bench has said internally that a majority of its workforce would be based outside of North America. However, CMO Charney said the recent cuts reflect “the realities of turning around the business and addressing legacy issues, rather than being part of any strategic outsourcing initiative.”

Charney told TechCrunch that Bench is continuing to explore longer-term solutions for employees, which the company calls “Benchmates,” but that this structure was the most viable option to get people onboarded quickly post-close. 

Beyond structuring its workforce, Bench has faced other challenges, the current and former Benchmates told TechCrunch. For example, a large number of Bench customers churned after tax season ended on April 15, they said. Bench also wasn’t able to finish many customers’ taxes on time, one person directly familiar with the matter told TechCrunch.

Some frustrated customers also alleged that Bench charged people for services they already paid for under prior ownership. (Bench told TechCrunch at the time that it honors all pre-paid services.)

Charney told TechCrunch that while some customers have left, this was partly an intentional move to let go of unprofitable customers.

“While we’ve seen an uptick in customer churn, a significant portion of it has been intentional and necessary,” Charney said. “Over time, legacy pricing and servicing decisions made before our acquisition of Bench led to a subset of customers being supported at a loss.”

Charney added that going forward, Bench has plans to grow both features and headcount.

For more, read Employer.com’s full statement on the Bench layoffs here.

You can send tips securely to this reporter on Signal at +1 628-282-2811.