Roa healthcare unicorn raised $150 million just a few months ago with a valuation of 7 billion dollarscut its staff by 18% to “manage costs, increase the efficiency of our organization, and better map our resources to our current strategy”, management written in an e-mail obtained by TechCrunch and confirmed by multiple sources.
“Due to our obligation to protect patient healthcare information, there will be no transition period for those leaving the company,” the e-mail continued. “We know this will feel abrupt and hopefully you can find other ways to connect to say goodbye to your teammates.” Affected employees will receive two months of severance pay and job placement assistance. Healthcare unicorn is offering two months of premium healthcare benefits.
Ro confirmed the news to TechCrunch and provided a copy of the aforementioned e-mail that CEO Zachariah Reitano sent employees. A spokesman said that Ro is still hiring.
Today’s layoffs, according to one source, affect most of Ro’s recruiting team. Another source said that the announcement was a surprise and that current employees were notified of the workforce cuts through Zoom without a chance to ask any questions. In the e-mail, Ro asserted that those affected by the layoffs were informed in 1:1 chats.
In the email, management said it has taken steps over the past six months to prepare for a possible recession, including narrowing its focus and raising more capital. The capital they are alluding to, although overvalued, is only funded by existing investors. The event sponsored less than its previous round. The absence of new investors signals that the company is stuck with those who already have a financial stake in the company’s future success.
Ro’s decision to lay off staff comes after several executives left the company, including Ro COO George Koveos, Ro Pharmacy CEO Steve Buck and most recently, the co-founder of Modern Fertility Afton Vechery. Vechery’s departure, which comes about a year after her company was acquired by Ro, has been rumored for more than six months – first sparked by an employee exodus that culminated in last year. At the time, former and current employees spoke of rising tensions at Ro due to the health tech company’s inability to generate meaningful revenue from newer products.
Its ED line continues to account for half of the health tech unicorn’s sales. In a statement, the company said, along with the pharmacy acquisition and growth, it has launched Ro Mind for mental health and Ro Derm for skin care. In a statement responding to TechCrunch’s 2021 investigation into Ro’s culture and business, Reitano said that Derm is on track to hit more than $20 million in revenue by 2021. He also said that revenue isn’t La. Code is growing faster than Roman, reported 150% year on year. more than five.
In an earlier separate email sent to employees, Ro management said that it would devote “more energy and resources to fewer initiatives” for the remainder of Q2 and H2. “Narrowing our focus doesn’t mean we’ll roll out fewer products or services to patients. In fact, we believe it will have the opposite effect. We will accelerate innovation for patients,” the memo continued, also noting that it will build “new products for existing patients”.
“The mantra for the rest of the year (and potentially beyond) will be growth with discipline,” the e-mail continued. A completely different feeling than just last year when the company raced to become the “Amazon of healthcare”.