By Heather Landi
Capsule joins the growing list of digital health and health tech companies slashing head counts in the face of a market downturn.
The New York-based digital pharmacy startup initiated staffing cuts this week that impacted 13 per cent of its workforce, Crain’s New York Business reported. Sales and marketing, software engineering, product, operations and expansion growth were among the affected departments, according to LinkedIn posts from former employees who were part of the layoffs.
Capsule did not respond to a request for comment.
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The company had 938 employees as of May, according to Pitchbook.
Founded in 2015, the company has expanded beyond New York City to more than a dozen markets including Austin, Chicago, Los Angeles and Minneapolis. The startup aims to build a “one-stop-shop” for digital healthcare where consumers can access Capsule’s digital pharmacy along with a curated set of products and services—such as telemedicine or mental health support—all from within a single app, according to company executives.
In April 2021, Capsule banked US$300 million in new capital funding that executives claimed raised its valuation to more than US$1 billion, vaulting it to “unicorn” status.
The company has raised US$570 million in the past six years, according to Crunchbase.
Weight loss telehealth company Calibrate also reportedly slashed 24 per cent of its staff positions in an effort to restructure and get the company closer to profitability, Bloomberg Law reported.
The layoffs affected about 150 of Calibrate’s 650 employees, the publication reported.
As the market restricts after two booming years of venture capital funding, a growing number of digital health companies have scaled back their workforces in an effort to cut costs.
Digital health startup Ro, which hit a US$7 billion valuation back in February, laid off 18 per cent of its workforce amid a market downturn. CEO Zachariah Reitano said the company took steps in the past six months to prepare for possible economic downturn including raising additional capital and narrowing its focus.
Primary care company Forward, reportedly worth more than US$1 billion, recently cut 5 per cent of its workforce.
Healthcare payments company Cedar eliminated 24 per cent of its staff positions with an eye on its bottom line and to adapt to “current market realities,” executives said.
Earlier this week, healthcare automation startup Olive confirmed it had laid off 450 employees as the CEO cited tough economic conditions as well as “missteps” in the company’s strategy.
Carbon Health, a hybrid primary care company that banked a hefty US$350 million funding round a year ago, cut 8 per centof its global workforce, or about 250 employees, the company announced earlier this month.
Cerebral laid off some employees as it restructures its operations. The company is mired in a federal investigation of its prescribing practices.
Health tech companies cutting staff this year included Mfine, a Bengaluru, India-based platform company (600 employees laid off); Stockholm-based digital health company Kry (100 employees); Thirty Madison, which recently merged with Nurx (24); divvyDOSE (62); Noom (495); Ahead (44); Chinese healthcare company WeDoctor (500); and Truepill, according to Layoffs.fyi, which keeps a database of reported layoffs.
