Cedar laid off 24% of its workforce this week, making the billing and payment startup the latest digital health company to make cuts, according to reporting by Insider.
In a post on LinkedIn, CEO and cofounder Florian Otto said affected workers were notified Wednesday, and the layoffs would help the startup “forge ahead sustainably on our mission.”
“We made the difficult decision to reduce our workforce, in order to adapt to current market realities, and re-organize ourselves for what we want to achieve following last year’s acquisition of OODA Health,” he wrote.
A Cedar spokesperson confirmed the layoffs to MobiHealthNews, saying the decision wasn’t made to support short-term cost cuts.
“Going forward, we are focused on creating a long-term strategic path to profitability that supports Cedar’s business and product goals, while continuing to exceed the expectations of our customers and their patients,” they said.
THE LARGER TREND
Cedar announced a $200 million Series D raise in March last year, boosting its valuation to $3.2 billion. A few months later, the company agreed to acquire OODA Health, a healthcare administrative platform for payers and providers, for $425 million. The deal closed in June 2021.
Cedar also recently moved headquarters in New York City, which it said would allow for more flexibility for its newly hybrid workforce.
“In addition to expanding our footprint last year to San Francisco and Salt Lake City after our acquisition of OODA Health, this move is reflective of our strategic growth and commitment to investing in our current workforce. I look forward to using the space to connect with colleagues and accelerate product innovation,” Otto said in a statement at the time.
Digital health investment slowed in the first quarter this year after a booming 2021, and many players struggled on the public markets as well. Cedar isn’t alone in pursuing layoffs.
In late June, direct-to-consumer virtual care company Ro laid off 18% of its workforce, months after announcing a $150 million raise. Diagnostics company Cue Health recently cut 170 manufacturing workers, which it attributed to larger economic conditions and the federal government’s move to divert funding from COVID-19 testing.
Early last month, Carbon Health CEO Eren Bali said the hybrid provider laid off 250 workers, about 8% of the company’s workforce.