Noom, a digital weight loss company, confirmed it was laying off employees as it undergoes a business transition.
The company did not specify the number of employees being let go, but it was first reported by TechCrunch to be around 500 people or 10% of its total staff.
It’s the second major layoff of this year for Noom. In April, it let go of around 500 employees, mostly its health coaches. After its first round of job cuts, the company said the move was to scale back text-based coaching and focus on scheduled video coaching.
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The layoffs come as the company is attempting to shift towards a more enterprise-focused offering rather than rely on direct-to-consumer revenue. Last Thursday, the company rolled out Noom for Work.
In an interview with Digital Health Business & Technology on its new offering, Firdaus Bhathena, Noom’s general manager for healthcare said the launch derived from users asking their employers to cover the cost of the company’s service.
“I have to believe that with consumers feeling the pinch of inflation and having less disposable income, having this covered becomes even more attractive,” Bhathena said.
While the majority of its revenue still comes directly from consumers, Bhathena said he eventually envisions an even split between the two businesses.
Amid this shift, Noom is undergoing changes in the C-suite as well. The company’s chief financial officer Mike Noonan is leaving for TripAdvisor at the end of October, which the company said was unrelated to the layoffs. Also, Bloomberg reported that co-founder and CEO Saeju Jeong is searching for a replacement as he plans to transition to the executive chairman role.
Last year, the New York-based company secured approximately $540 million in a Series F funding round led by Silver Lake. At the time, the company said it would use the capital to expand its platform to address more conditions and fund geographic and employee benefit program expansions.
