Healthtech Startup Healthify Lays Off 150 Employees in a Restructuring Move

The employees who were fired have been offered two months' salary as severance pay, extended insurance coverage, accelerated stock vesting period in some cases, and leave cash encashment.

Healthify, formerly known as HealthifyMe, has laid off around 150 employees, or about 27% of its workforce, in a restructuring exercise.

Reportedly, the layoff has majorly affected employees from sales and product teams.

“We deeply understand the impact of these changes on our affected employees and will provide them robust support during this transition, including comprehensive severance packages, extended insurance coverage, and job placement assistance,” Healthify noted in a statement.

What Went Wrong

Commenting on the sudden job cut, Tushar Vashist, cofounder & CEO, Healthify, said that the move is undertaken as the startup is looking to make its India business EBITDA profitable and expand its offerings in the US market.

“In the next three-four months, our India business will turn EBITDA profitable and this restructuring was an unfortunate but an important step in line with achieving this. We also have to make sure we have enough resource allocation for the global expansion,” Vashisht said.

Moreover, the employees who were fired have been offered two months' salary as severance pay, extended insurance coverage, accelerated stock vesting period in some cases, and leave cash encashment.

However, the present layoff is an addition to the previously held job cut in the startup. In December 2021, Healthify had laid off around 150 employees from various teams, including SME (subject matter expert), quality analytics, product, and marketing.

How Healthy is Healthify’s Playbook

Last year in June, the Bengaluru-based platform raised $30 million in a pre-Series D funding round.

The funding was led by LeapFrog Investments, Khosla Ventures, FinnFund, and Van Lanschot Kempen, with participation from existing investors Unilever Ventures, Blume Ventures, Chiratae Ventures, and Healthquad.

The investment consisted of a combination of equity and venture debt. Back then, Healthify planned to utilize the funds to enhance its AI-powered product offerings further.

In 2017, it introduced its AI-powered virtual assistant named Ria, which provides nutrition and fitness advice in over 10 languages. By integrating generative AI into its platform, Healthify aims to assist nutritionists in delivering personalized advice to customers.

Further, Healthify has raised around $130 Mn in total funding to date and counts the likes of Sistema Asia Capital, Athera Venture Partners, and Innoven Capital among its backers.

Founded in 2012 by Tushar Vashisht, Mathew Cherian, and Sachin Shenoy, Healthify is a digital platform that aims to guide users towards a healthier lifestyle by providing personalized diet and workout plans.

Its core features include AI Coach Ria, a personalized AI health coach, HealthifySnap for meal tracking, and seamless integration with wearable technology for fitness tracking.

In FY23, Healthify’s net loss touched INR 142 Cr, down from INR 157 Cr in the preceding fiscal year. Concurrently, there was a 23% increase in operational revenue, rising to INR 228.76 Cr from INR 185.25 Cr in FY22.

In a similar development, Kaiser Permanente, one of the largest healthcare organizations in the US, laid off more than 100 IT positions nationwide, with the majority in Northern California.

Reportedly, 65 of the affected positions are based in Northern California, including 12 workers across three Oakland offices, 41 workers in a Pleasanton office, one worker in South San Francisco, and one in Walnut Creek. However, no union workers were affected in this round of layoffs.