Digital mental health platform Cerebral announced it’s letting go of 15% of its workforce in its third round of layoffs since last summer.
In a LinkedIn post, the company’s CEO David Mou confirmed the layoffs, saying the reduction was a business decision to align with company needs and not associated with individual performance.
“As a young company, we grew quickly to support a rapidly growing patient count and to manage expanding clinical needs, especially through the pandemic. Workforce reductions are incredibly hard, especially for those impacted directly. We will be offering various benefits to support our impacted colleagues as much as possible. Those who are affected have my deepest gratitude for all they have contributed to Cerebral and its important mission,” he wrote.
In an email to MobiHealthNews, a company spokesperson said the layoffs are a culmination of Cerebral’s reorganization plans, and “affected employees will be fully supported with extended severance pay and benefits, as well as outplacement services.”
According to Business Insider, which first reported the news, the layoffs affect roughly 285 employees.
THE LARGER TREND
Cerebral, which launched in 2020, has faced a plethora of scrutiny within the last year, including its prescribing practices, social media marketing, treatment of employees and data sharing practices.
In early May, the company received a grand jury subpoena from the U.S. Attorney’s Office for the Eastern District of New York for possible violations of the Controlled Substances Act over its prescribing practices for medications such as Adderall.
Shortly thereafter, the company paused its prescriptions of controlled substances then weeks later said it would completely stop prescribing controlled substances to new and existing patients. It subsequently announced a transformation plan that included reviewing its clinical and marketing practices.
In June, the WSJ reported the Federal Trade Commission was investigating whether Cerebral was involved in deceptive or unfair marketing or advertising practices.
Weeks later, Bloomberg reported the company laid off 350 people. In October, Cerebral cut another 20% of its staff, affecting employees across the company, including at headquarters and among clinical care staff and support workers.
Last month, bipartisan senators sent Cerebral, along with two other digital health companies, letters expressing concerns over the providers’ data sharing practices, urging the companies to better protect users’ healthcare data.