Noom, a digital weight loss company, confirmed that it was laying off employees as the company was going through a business transformation.
The company did not specify the number of employees being laid off, but was first reported by TechCrunch about 500 people, or 10% of its total employees.
This is Noom’s second major layoff this year. In April, it laid off about 500 employees, mostly health coaches. After the first round of job cuts, the company said the move was made to scale down text-based coaching and focus on scheduled video coaching.
The layoffs come as the company is trying to transition to a business-focused service offering rather than relying on direct-to-consumer services. Last Thursday, the company launched an offer called Noom for Work.
In an interview with Digital Health Technology & BusinessFirdaus Bhathena, Noom’s general manager for healthcare, said the launch stemmed from users asking their employers to cover the cost of the company’s services.
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“I have to believe that with consumers feeling the pressure of inflation and less disposable income, this insurance becomes all the more attractive,” says Bhathena.
While the majority of revenue still comes directly from consumers, Bhathena said he ultimately envisions an even split between the two businesses.
In the midst of this change, Noom is also undergoing changes in the C-suite. The company’s chief financial officer, Mike Noonan, is leaving for TripAdvisor at the end of October, a move the company says is unrelated to the layoffs. Also, Bloomberg reported that co-founder and CEO Saeju Jeong is looking for a replacement as he plans to move into the role of executive chairman.
Last year, the New York-based company raised about $540 million in a Series F funding round led by Silver Lake. At the time, the company said it would use the capital to expand its platform to address more conditions and fund the expansion of employee benefit programs.
This story first appeared on Digital Health Business & Technology.
