founder to step down as CEO months after WSJ report

The founder and chief executive of announced her resignation on Tuesday, five months after a Wall Street Journal investigation showed that the online marketplace provided limited vetting of its caregivers, sometimes with tragic results. shares fell more than 20% on Tuesday as it reduced revenue and earnings expectations for the 2019 fiscal year. The company said the revised guidance was in part because of the “word-of-mouth” impact of the Journal’s investigation. The company has overhauled its screening practices in recent months to include in-depth background checks for caregivers.

Sheila Lirio Marcelo said she was stepping down from, about 13 years after the former venture capitalist founded the company based in part on her experience trying to find care for her father, who had suffered a heart attack, and her two children.

The company, which counts 34 million families and caregivers in more than 20 countries as users of its services, is the largest online marketplace for caregivers and babysitters.

Marcelo will become executive chairman and will participate in a coming search for a new CEO. She will remain in the position until a successor is appointed.

Marcelo’s resignation comes after the Journal’s investigation in March found instances in which caregivers hired through the platform had police records and were accused of committing crimes while caring for clients.

The investigation also found that many day care centers listed on the website as holding state licenses didn’t actually possess those licenses. The company removed tens of thousands of unverified listings before the Journal’s investigation was published.

In subsequent months, made multiple changes to its business, saying it would begin conducting in-depth background checks and take other steps to screen caregivers on its online network, such as verifying their Social Security numbers and checking for criminal histories.

Source: Gazette

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