Dive Brief:
- Teladoc Health is cutting 6% of its workforce, or 300 jobs, in a bid to lower operating costs, the virtual care company disclosed Wednesday.
- The layoffs among Teladoc’s non-clinician global staff are part of the company’s restructuring plan and previously announced cost-saving measures, some of which took place in the fourth quarter, Teladoc said in a filing with the Securities and Exchange Commission.
- The plan is also resulting in office space reductions in certain markets, although layoffs did not have a material impact on 2022 operating results, according to the New York-based telemedicine company. The impact of the restructuring will predominantly be felt in the U.S.
Dive Insight:
In a letter to employees on Wednesday, Teladoc CEO Jason Gorevic called the layoffs a “difficult but necessary step.”
The company said it was removing redundant roles following its mergers, in addition to wanting to transition to a more balanced growth of revenue and profitability. Market watchers have raised concerns about the long-term solvency of digital health companies, as valuations took a sizable hit last year following a pandemic-era boom, and experts don’t expect the market volatility to let up.
“At this stage in both our evolution and given the challenged economic environment, we believe that balanced growth is the right step for us,” Gorevic said in the letter.
A spokesperson for Teladoc declined to comment on whether the layoffs would be ongoing.
Teladoc is the latest digital health player to initiate layoffs. In June, Sidecar Health, Ro, Cerebral, Cue Health and Carbon Health were among startups that slashed jobs citing economic hardship, setting off a flurry of workforce reductions that’s continued into 2023.
This month, Carbon and Cue again announced layoffs, as did Google’s sister company Verily, which let go roughly 15% of its employees. Digital health company Akili Interactive laid off 30% of its workforce on Jan. 12. The same day, healthcare analytics provider Definitive Healthcare laid off 6% of its staff.
Departing Teladoc staff will receive enhanced severance and bonuses for 2022, Gorevic said. Teladoc expects to incur roughly $4.4 million in charges for the fourth quarter related to the restructuring, and $17 million in charges in 2023.
