"Inside the Unexpected Downfall and Astonishing Resurgence of Bench, the VC-Backed Accounting Startup that Collapsed During the Holidays."

On December 27, the day was expected to mark the start of a relaxing holiday weekend, but for many small business owners using the services of Bench, a Canadian accounting and tax startup, it was a chaotic day. That morning, thousands of users found themselves unable to access their accounts right at the start of tax season. Bench's website was down, except for a notice announcing the company's closure after 13 years of operation. According to former employees, hundreds of Bench workers were laid off immediately and without any compensation.

The sudden interruption took many of its clients by surprise. Justin Metros, co-founder of Radiator, mentioned that he learned about the situation when he was contacted by a media outlet. "I've never seen anyone shut down like that. It's crazy," he commented.

Bench had presented itself as a modern accounting and tax company, with a platform accessible to small and medium-sized businesses; it claimed to have over 12,000 clients before its closure. However, among its struggles was an attempt to adopt artificial intelligence and automation tools in recent years. Many former employees expressed that while automating accounting tasks seemed feasible in theory, it turned out to be complicated in practice. According to some of them, the execution was poor and the designed systems did not function properly. Overconfidence in these tools affected service quality, leading to delays that resulted in client loss.

Bench underwent several rounds of layoffs since late 2022, reducing its workforce from nearly 700 employees to fewer than 400 by the end of 2024. The instability also extended to its upper management. Ian Crosby, co-founder and first CEO of the company, left the firm in 2021 after accusing board members of forcing his departure over disputes regarding strategic decisions. His successor, Jean-Philippe Durrios, tried to make the company profitable but failed to resolve operational issues or client attrition.

The constant changes in leadership culminated in the arrival of Adam Schlesinger as CEO in November 2024, who was appointed to carry out the sale of the company. However, Bench was forced to shut down abruptly on December 27 after a bank demanded payment of a venture capital-related debt. Interestingly, the media attention that emerged after the closure helped Bench be considered for acquisition.

Jesse Tinsley, CEO of Employer.com, learned of the closure while on vacation and, along with his team, quickly negotiated the acquisition of Bench. Employer.com, which previously had no experience in accounting, promised to revitalize Bench by rehiring many former employees and committing to honoring contracts with clients.

Despite the promises from Employer.com, doubts remain about the sustainability of Bench. Mergers and acquisitions take time and thorough analysis, something that seems complicated given the speed at which this operation was carried out. Furthermore, there are uncertainties about the quality of service that former clients of Bench will receive, especially considering that many former employees are being called back under short-term contracts, which exacerbates concerns about the stability of the business.