Another digital health 'unicorn' is trimming staff as Olive, the Columbus, Ohio-based healthcare AI company, said it was laying off around 450 employees, which equates to 35% of its workforce.
"This was an incredibly difficult decision but one necessary for Olive moving forward,” Olive CEO Sean Lane wrote in a letter to staff. Lane cited economic headwinds as one reason for the decision but also said the company made missteps as it was in growth mode.
"Our fast-paced growth and lack of focus strained our product and engineering resources and prevented us from executing quickly on key initiatives. I take responsibility for this," Lane said.
Lane added that evolving customer expectations and increased competition were other challenges.
One year ago, the company secured $400 million dollars in a funding round led by Vista Equity Partners at a valuation of more than $4 billion. At the time, the company said it was planning to reach more providers and scale product development.
A spokesperson from Olive said the company had 1300 employees prior to the layoff.
Digital Health Business & Technology has obtained the letter that Olive sent to the Ohio Office of Workforce Development to give notice on the layoffs. The letter reveals that the positions eliminated by the company span different functions including engineering, marketing, sales and administration.
Going forward, the company said it will focus employee resources on its revenue cycle and utilization management products for providers and payers, which account for more than 80% of its existing and pipeline revenue.
Lane also said the company is focused on profitability sooner than it originally planned.
The layoffs come as investors encourage digital health companies to focus on healthy balance sheets and profitability. In the past two weeks, three other digital health ‘unicorns,’ Cedar, LetsGetChecked and Forward, underwent layoffs of their own.