Telehealth staffing and services company Wheel confirmed it cut 28% of its workforce, laying off 56 employees.
The layoffs mark the second round of recent job cuts at the startup, which laid off 17% of its staff over the summer. According to an email obtained by Insider, CEO Michelle Davey said the August layoffs were “the right decision to make for our long-term success.”
THE LARGER TREND
Wheel launched its services in 2020 alongside a $13.9 million Series A raise, about two years after the company was founded. Early last year, the company announced it brought in $150 million in Series C funding, bringing its total raise to $216 million.
In November, Wheel announced it was buying GoodRx’s backend virtual care technology for $19.5 million in cash. At the time, about 20 GoodRx workers received offers to join the company.
Layoffs in digital health — and in tech companies more generally — have become more common, with a number of health tech players shedding workers. Companies that raised huge rounds in 2021 like Noom, Innovaccer and Komodo Health have recently cut staff.
Investment declined last year compared with a booming digital health funding environment in 2021, though early stage deals largely held steady, according to Silicon Valley Bank’s Healthcare Investments and Exits report.
“You’re seeing a lot of these early-stage investors hiding out in seed, Series A because it allows them to not have to worry about these 2021 valuations that we saw in the market that we have to deal with at some point,” Jonathan Norris, managing director for business development in SVB’s healthcare practice, told MobiHealthNews last month.
“But it allows them to do early-stage, reasonable valuations. It also allows them to finance 12 to 24 months out and potentially think about that next round being on a little bit of an upswing outside of a down market.”