Some of digital Health’s best capitalized startups are struggling.
A string of healthcare unicorns have announced layoffs in recent weeks, including Ro, Cerebral, Forward and Calibrate. While these companies are all targeting different corners of healthcare — from direct-to-consumer health care to virtual mental health — the layoffs show a similar response to the macroeconomic environment.
It’s a shift in tone for the companies, many of which were valued at over $1 billion and enjoyed a massive spike in customer interest during the pandemic. For budding entrepreneurs, this shift brings with it a series of lessons about the nuances of working in digital health. Let’s see.
Ro, which raised $150 million just months ago at a valuation of $7 billion, cut 18% of its workforce to “manage spending, increase the efficiency of our organization and better align our resources with our current strategy.” his leadership wrote in an email obtained by Marketingwithanoy in June.
The layoff comes at a time when the company, which aims to scale up DTC care such as pills and mental health care, will also be firing executives. The company has lost its COO George Koveos, GM of Ro Pharmacy, Steve Buck, and most recently co-founder of Modern Fertility, Afton Vechery.
In the spring, Ro’s leadership said in an internal memo that they will “put more energy and resources into fewer initiatives” for the remainder of Q2 and H2. “Narrowing the focus does not mean that we will launch fewer products or services for patients. In fact, we think it will have the opposite effect. We will increase the rate of innovation for patients,” the memo reads, adding that the company will build “new products for existing patients.”
This focus on growth and discipline clearly didn’t stop the company, which still appears to be recruiting, from cutting staff to cut costs.