Redesign Health, a healthcare startup creator, is reducing its workforce, cutting 77 staff positions, as it slows the pace of new company launches this year, Fierce Healthcare has learned.
In an email to Redesign Health employees sent Tuesday morning and obtained by Fierce Healthcare, CEO and founder Brett Shaheen said the downturn in the U.S. venture market "will last longer than the company had anticipated and hoped."
"Given this, we believe it is in the best interest of our investors and existing portfolio companies to slow the pace of new company creation. Our decision to do so requires us to reduce and reallocate elements of our cost structure. While difficult, we believe these steps are necessary to ensure our long-term financial health and enable continued and new investments in support of our founders," Shaheen wrote in the email.
It's estimated that New York City-based Redesign Health has about 200 to 250 employees.
The impact of the workforce reduction primarily in departments geared towards supporting new venture creation. Impacted employees will receive financial and professional support, including a generous separation package, healthcare and outplacement services to support transitions to new roles, Fierce Healthcare learned.
A small number of those impacted will be staying on through June.
Redesign Health is backed by major investors including General Catalyst, CVS Health Ventures, UPMC Enterprises, the innovation and venture capital arm of health system UPMC, Eden Global Partners, Euclidean Capital, Samsung Next, TriplePoint Capital and Declaration Partners.
The company has raised $164 million in funding to date, including a $65 million funding round in September 2022. That round boosted the company’s post-money valuation to $1.7 billion, Fast Company reported.
Since 2018, Redesign Health has built more than 65 healthcare companies, including 40 in the past two years alone, Fierce Healthcare has learned. The startups span verticals including cancer care, teleaudiology, senior care, value-based endocrinology and metabolic health.
Only 35 startups are listed on its website. Companies Redesign has helped launch include Jasper Health, which helps cancer patients manage treatment, Dan Trigub's MedArrive, men's health startup Vault Health, infusion care startup Uptiv Health and metabolic health company Calibrate, among other ventures.
As Redesign Health focuses its attention on supporting existing companies this year, it is rightsizing its team to reflect that, according to the email sent out to employees.
The company will continue to create new companies and invest in certain growth areas.
In October 2022, Redesign Health laid off 67 employees, or roughly 20% of its workforce, amid the market downturn, Fast Company reported. Redesign Health called the cuts a “restructuring move,” the publication reported. At the time, Redesign Health said the layoffs could be tied to its continued strategic evolution as opposed to a financial decision.