Headspace Health, a digital mental health ‘unicorn’, laid off 181 employees, or 15% of its staff, on Thursday.
The company said in a statement that the cuts will help Headspace open the path to profitability. This is Headspace’s second round of layoffs in the past year, after it cut 50 employees in December.
Headspace provides mediation, behavioral health coaching, therapy, and mental services content directly to consumers as well as employers and health plan clients. Headspace Health CEO Russell Glass told Modern Healthcare in November that inflation and economic headwinds have created challenges for the consumer landscape for subscription services.
“Consumers are struggling. They are facing inflation, economic hardship, and they have increasing mental health needs,” Glass said. “We’re looking for different ways to reach them to reduce their out-of-pocket costs, which is why our health plan agreements are so important.”
Headspace Health came together when Headspace and Ginger merged in August 2021 in a deal that valued the combined company at $3 billion at the time.
As the digital health funding market veered downwards, some companies once considered unicorns have had to lay off employees, sell lagging businesses and even file for bankruptcy. Some are moving into new product lines while others forge ahead.
