Under pressure insurtech Vesttoo is set to lay off a large portion of its global workforce as it continues to work to identify how the fraudulent letter of credit (LOC) collateral issue occurred.The goal is to continue working through the audit and any issues found, while doubling-down on the provision of core services, as Vesttoo seeks to come out the other side of this issue without suffering fatal ..Vesttoo stated today, “The company is conducting a rigorous internal and external analysis of the events leading up to the first report of a fraudulent LOC.

We have engaged an experienced global risk, audit and compliance expert and external attorneys to advise us throughout this process.“In order to solidify the foundation of the company and reassure the industry, leadership must return its focus to core services while reducing overall costs, including parting ways with some of our employees.These are painful, but important decisions that we must make at this time.

Our focus remains on regaining our footing and emerging from this challenge stronger than before.“We thank those who are leaving us for their contributions and will be working to support them through this transition.” We’re told that these lay offs will involve a large portion of the global Vesttoo workforce and that it will be across the board, with all teams and geographies affected.The insurtech had hired rapidly as it sought to grow out technology, insurance and capital markets teams, having raised significant venture capital.

Now, with the collateral issue hanging over the company, it seems Vesttoo will adopt a strategy to downsize and reduce its costs, while refocusing on the technology promise it had originally offered the industry, as it seeks to come out of this issue either unscathed, or with as minimal as possible damage to its business.Time will tell how successful that can be.Israeli media Calcalist later reported that the number of lay offs could total 150, representing around 75% of the company.

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