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Telehealth startup Cerebral to lay off about 20% of staff

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Dive Brief:

  • Telehealth startup Cerebral informed employees Monday that it is reducing its workforce by about 20% in a restructuring effort, The Wall Street Journal reported.
  • A Cerebral spokesperson confirmed the job reductions in an email to Healthcare Dive without specifying the number of cuts planned, saying the changes are part of an ongoing initiative to create more sustainable growth and stability at the company.
  • This is the second spate of layoffs this year for the company, which terminated contractors — including nurse practitioners and support staff — over the summer, the Journal reported.

Dive Insight:

Cerebral was founded in 2020 with a mission to improve access to high-quality mental health care and shorten wait times for patients, compared to traditional providers.

The need for such services has increased as the COVID-19 pandemic has caused a surge in anxiety and depression, prompting the Biden administration to step up funding for mental health services.

The San Francisco-based company offers the services of licensed clinicians, behavioral counselors, therapists and nutritionists, all online. By the end of 2021, Cerebral said it had raised $462 million in venture capital and had more than 2,000 clinicians across all 50 states.

The past year, however, has been a rocky one for the startup telehealth provider, as it faced dissatisfied patients and a Justice Department investigation into allegations it overprescribed controlled substances. The company announced in May it would pause the practice of prescribing controlled substances such as ADHD treatments Adderall and Ritalin.

Later in the month, Cerebral announced that CEO Kyle Robertson would leave his position effective immediately, replaced by President and Chief Medical Officer David Mou. It also announced a transformation program aimed at achieving long-term growth.

The company said in its statement Monday that the restructuring was continuing.

“Today’s changes are part of Cerebral’s ongoing transformation program, which drives to create more sustainable growth and stability, while further delivering our mission to democratize access to high-quality mental health care for all,” the company spokesperson said. “They will enable the company to pursue a patient-first growth model that supports and empowers clinicians. We are deeply appreciative of our employees’ commitment to our mission and service to Cerebral.”