Healthcare automation startup Olive has laid off 450 employees as the CEO cited tough economic conditions as well as "missteps" in the company's strategy.
The Columbus, Ohio-based company announced changes to its strategy and structure Tuesday, which resulted in "difficult but necessary organizational shifts," a company spokesperson said.
The company has grown rapidly over the last several years.
"Olive’s values of 'choose vision over status quo' and 'act with urgency' drove us to make significant investments across the most pressing parts of healthcare, scale our teams and move quickly to bring solutions to the market," CEO Sean Lane said in a message to employees posted on Olive's website.
"The realities of today’s economy are forcing the company to rethink this approach," Lane wrote.
While Olive is experiencing many of the same headwinds as other organizations—including shifts in the industry landscape, evolving customer expectations and challenging market conditions—the company also needs to "reconcile missteps" that were made, Lane said.
"Our fast-paced growth and lack of focus strained our product and engineering resources and prevented us from executing quickly on key initiatives. I take responsibility for this," he wrote.
The company is shifting its strategy to achieve profitability sooner than originally planned, he said.
Olive will focus on expanding its customer base, driving steady revenue growth and creating value for the market and customers.
Lane and his team first deployed Olive in 2017 with the idea to tackle the high-volume, repetitive and manual tasks healthcare workers do every day but faster and more accurately. The company has been tackling issues like prior authorization through the acquisition of AI software provider Verata Health.
A year ago, the company raked in $400 million in fresh capital to build out its enterprise AI for hospitals. The round, led by Vista Equity Partners, boosted the company's valuation to $4 billion, it claimed.
Since March 2020, the startup has raised $832 million in financing and a total of $902 million since the company’s founding in 2012.
Last year, Olive entered the operating room with the acquisition of Empiric Health, an AI-powered clinical analytics and service company that focuses on identifying unwarranted clinical variation—starting in surgery. Through that acquisition, Olive expanded its capabilities for supply chain and clinical analysis for surgeries.
Olive executives said a year ago that its enterprise AI was in place at more than 900 hospitals in over 40 U.S. states, including more than 20 of the top 100 U.S. health systems.
With the staff cuts, Olive is offering severance benefits and outplacement services as well as 60 days of salary continuation.
Going forward, Olive plans to focus on end-to-end processes that enable payer-provider connectivity, specifically its flagship revenue cycle management solution for providers and utilization management analytics for payers, Lane said in the post. Those solutions currently make up about 80% of Olive's existing revenue and pipeline.
As part of this strategy, the company consolidated teams across sales, customer, product and engineering divisions and eliminated roles that weren’t directly tied to its new go-forward plans.