Lane wrote the company had grown quickly over the past several years, hiring new staffers and launching new tools. But the “realities of today’s economy” are pushing the automation company to pull back from that strategy.
Going forward, Olive will focus on the company’s Autonomous Revenue Cycle product geared toward providers and its Utilization Management Transformation tool for payers. The letter said the plan will help Olive become profitable more quickly than the startup had first planned.
Laid off employees received an email notifying them that their last day is today, but their official employment will end in 60 days. Lane wrote that affected workers will be eligible for two weeks of severance per year of service as well as job placement support and access to a talent portal.
“While we are experiencing many of the same headwinds as other organizations – including shifts in the industry landscape, evolving customer expectations and challenging market conditions – we also must reconcile missteps we made,” Lane wrote.
“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.”
THE LARGER TREND
The layoffs come about a year after Olive announced it had closed a $400 million funding round that boosted its valuation to $4 billion. It also raised multiple rounds in 2020, including a $225.5 million investment announced in December that year.
In April, Axios reported that Olive wasn’t delivering on its promises to generate big cost savings for health systems by automating administrative tasks.
Olive is far from the only digital health company pursuing layoffs this summer. Payment startup Cedar laid off 24% of its workforce earlier this month. Ro, a direct-to-consumer virtual care unicorn that earlier this year raised $150 million, let go of 18% of its workforce. Diagnostics company Cue Health, hybrid provider Carbon Health, primary care company Forward and mental health startup Cerebral have also laid off employees.
A Rock Health report on digital health funding through the first half of 2022 found growth-stage companies may face particular challenges in the current market, noting the recent spate of layoffs. Sizes of Series B, C and D+ deals declined compared with 2021, while Series A rounds stayed steady.