McLean software company ID.me Inc. has laid off dozens of employees following a period of rapid growth and just months after the Internal Revenue Service halted use of ID.me's facial recognition technology to verify taxpayers' identification.
The layoffs affected 54 employees, according to the Worker Adjustment and Retraining Notification Act notice reported on the Virginia Employment Commission’s website. The notice date and the impact date — when the layoffs would take place — were both listed as June 7. It’s not clear when the laid-off workers were alerted.
The 12-year-old company framed the layoffs as part of an effort to improve efficiency. “As ID.me progresses, we continue to look for ways to reduce redundancy and streamline our processes through technological innovation,” ID.me said in a statement in response to questions from the Washington Business Journal.
The reductions come just months after lawmakers criticized the IRS for using ID.me's facial recognition software to confirm taxpayers’ identities, citing data and privacy concerns. The agency ultimately stopped the use of the facial recognition software provided by ID.me, which then expanded its selfie-free identity verification — relying on a video chat instead of a selfie — to all its government clients.
The firm said none of the company’s video chat agents were included in the layoffs.
ID.me declined to describe the eliminated roles in any detail. “With economic headwinds beginning to be felt across many industries, as good stewards of our company we must position ID.me for long-term success,” the company said in the emailed statement. “ID.me is committed to investing its resources wisely to ensure its customers continue to be properly served.”
In addition to the IRS, ID.me, led by co-founder and CEO Blake Hall, has contracts with the Social Security Administration and multiple state unemployment systems. The company had expanded rapidly during the pandemic to keep up with growing demand at the time, hiring more than 1,300 employees in 2021 — more than quadrupling from the mere 350 it had in November 2020 — and announcing plans in January to hire an additional 750 video chat agents.
But the rapid expansion led to problems, according to a Business Insider investigation, including employee accusations of sharing of user Social Security numbers on company Slack channels and new hires being given access to confidential information before having passed a background check. A spokesperson for ID.me disputed many of the claims in the piece.
The company raised $100 million in debt financing in September after raising $100 million in March 2021. It has raised $241.33 million to date and is valued at more than $1.5 billion, according to venture data firm PitchBook.
