Lyra Health, a provider of mental health benefits for employees, laid off 2% of its total workforce last Monday, Fierce Healthcare has learned.
The layoffs affected 77 people, according to a former employee who was part of the cuts and spoke on the condition of anonymity. At least some of the employees received severance for 12 weeks with health benefits. A company spokesperson did not confirm or deny these details.
The layoffs were the result of a restructure of several non-clinical teams on the operational side of the company, a Lyra spokesperson told Fierce Healthcare. “We made these changes to better support our customers, providers, and clients as Lyra grows in our evolving market,” the spokesperson said in a statement. “Mental health remains a defining problem of our time and we have an unshakeable conviction that Lyra will continue to be the leader in this field, as evidenced by the fact that Lyra provided its 10 millionth session of care last week.”
The clinical side, Lyra Clinical Associates, was not impacted, the spokesperson confirmed.
In a companywide email sent last week by Lyra co-founder and CEO David Ebersman, and viewed by Fierce Healthcare, Ebersman wrote, “This is a sad day for us, and these were hard decisions. Over the past few years, Lyra has fared better than many companies and has maintained impressive growth and a strong financial position. However, we must also adapt to set ourselves up for success in 2025 and beyond.”
Restructuring some areas would offer more efficiency, he added, and “we need to adjust to our evolving market.” He thanked those getting let go for their contribution and offered support for navigating the transition to those who remain.
The former employee alleged that until the past year, the company prioritized work-life balance for its providers by allowing them to have more flexibility over their schedules and to have less of a caseload. As the need to achieve profitability by 2025 became more urgent, the former employee said, that got squeezed.
“It really started to change the culture of the company,” the former employee recalled. “It felt like a shift away from 'Let’s provide the best care possible'…to 'Let’s get clients in the door'.”
Over time, Lyra providers faced increased expectations for the number of clients they should see without seeing an increase in their overall compensation, according to the former employee, who had direct knowledge of clinicians’ pay structure. The latest layoffs were an extension of that cost-cutting trend. “I feel like the company has kind of lost track of its own mission and is doing that at the expense of clinicians in order to drive profit,” they said.
Lyra used to tout to employees, and had on its website, seven core values, the former employee said. Those values were: put clients first, follow the science, show your cards, listen harder, look inwards, tackle hard problems and mind yourself. A screenshot of the values from an employee onboarding handbook was viewed by Fierce Healthcare. Those values are no longer on the Lyra website, the former employee noted.
“One of the values is putting clients first and in trying to do that they’ve lost taking care of our clinicians,” the former employee said.
In response, a Lyra spokesperson told Fierce Healthcare, “Lyra continues to offer providers the most competitive compensation package in the industry and we remain wholly committed to our core values.”
Lyra is a unicorn company, hitting a valuation of $5.58 billion during the COVID-19 pandemic. In 2022, it picked up ICAS World, an employee assistance program provider operating across more than 155 countries. The acquisition represented more than 10 million global members on a single platform.
Lyra offers evidence-based care across a range of mental health concerns, including more serious issues like alcohol use disorder and suicidality, with programs for those conditions rolled out in 2022.