Olive AI announced this morning that it will lay off 450 employees during a shift in business strategy, according to an email sent to employees by CEO Sean Lane.
Why it matters: The $4 billion healthcare automation company’s layoffs follow a series of mass employee departures and hiring freezes, as well as an Axios investigation in April.
What they’re talking about: In the letter, Lane wrote that the company “must reconcile the mistakes we’ve made,” including a “lack of focus.”
“Our rapid growth and lack of focus strained our product and engineering resources and prevented us from executing critical plans quickly,” Lane wrote. “I am responsible for this.” A company spokesperson said in a statement provided to Axios that the layoffs were “based on the realities of today’s economy and the same headwinds facing other organizations.”
Context: Three sources told Erin that Olive froze hiring on May 23 and repeatedly told employees that layoffs were not in the company’s future.
According to three sources and LinkedIn, about 40 employees have left the company since then, many in senior leadership roles, including: Chief Revenue Officer Chief Customer Officer Finance, Sales Enablement and Senior Vice President of Engineering Marketing and Events Manager Senior Director Staff Development and Engagement Healthcare Research Director Cloud Infrastructure Director People Operations Coordinator
By the numbers: Layoffs account for about 31% of the company.
Details: Going forward, Olive will transform its strategy by focusing on just two products rather than a large number of products, so that the company can become profitable “more quickly than we originally planned,” the letter reads.
These products include automated revenue cycle tools for suppliers and usage management tools for payers. Olive employees affected by the layoffs were told their regular jobs would end in 60 days, but their last day of work was Tuesday. “Qualified employees” will also receive at least 10 weeks’ pay, including 60 days’ pay, until September 19, 2022. Employees are also “eligible” for severance pay for two weeks of service each year, as well as benefits through the end of September, including access to First Stop Health and Brain, according to the letter.
This story has been updated to include a link to the CEO’s email and other reports of recent departures.