Months after the announcement of a $150 million fundraising drive that boosted valuation to $7 billion direct-to-consumer virtual healthcare company Ro lays off 18% of its workforce.
“As we have taken steps over the past six months to prepare for a potential downturn, including raising additional capital and narrowing our focus, we came to the unfortunate conclusion that we needed to make more drastic changes to reduce costs. control, increase the efficiency of our organization and better allocate our resources to our current strategy,” CEO Zachariah Reitano wrote in an email to staff first obtained by TechCrunch and Insider†
According to the email, affected employees were informed of the decision in one-on-one meetings on Thursday morning. Dismissed employees will receive two months of severance pay and benefits, and Ro extends the exercise period of options to three years. The startup also offers career services for affected personnel.
THE BIGGER TREND
Launched in 2017 as a As a men’s health clinic that offers erectile dysfunction treatments, Ro has since expanded into mental health, weight management, and dermatology.
Beyond the $150 million fundraiser announced in February, the virtual care startup has acquired several companies in the past year, including: male fertility focused Dadi, home diagnostic company Kit and Modern Fertility.
Ro isn’t the only digital health company pursuing layoffs amid the market downturn. Earlier this month, hybrid provider Carbon Health announced it would lay off 250 employees, about 8% of the company’s global workforce.
The controversial mental health company Cerebral is also: eliminating positions, digital pharmacy Truepill laid off 15% of its workforce and chronic condition management company Thirty Madison laid off employees after its merger with Nurx.
ON THE REGISTRATION
“In light of the current environment, we have decided to realign our teams to better align with our strategic priorities. As a result, Ro has made difficult but significant changes to the company’s organization. We are incredibly grateful for the contributions of all affected and have done our utmost to support them through this transition,” a Ro spokesperson wrote to MobiHealthNews†