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The license requirement cheating (in one jurisdiction) and outright selling without a license (in other jurisdictions) were problems occurring in Sales (which may implicate some problems in Recruiting, as well.)

I don't recall any of their problems being traced to engineering. So, while these are for PR purposes styled as redundancies, I think its at least worth considering that it may be more of a purge of the problem parts of the company.

Here is what may be the reasons: - Because sales team is more easily replaceable than core engineering team. - There is less any redundancy in engineering team when compared to sales. - Zenefits is reducing their sales operation.

Why do you assume they aren't getting paid market wages? Your statement, in a way, is contradictory. Engineers are perceived as scarce, but they aren't paid market wages.

Sales has probably gone through the pipeline of customers and engineering is probably still working on building out everything that was promised to customers?

I can't tell if this is sarcastic or not, but there have been lots of engineering layoffs as well. Twitter and Yahoo, for example.