Clover Health will cut 140 jobs, about a quarter of its workforce, in a bid to add more clinical and insurance expertise to its team.
Clover said in a statement to FierceHealthcare that rethinking the company’s staff was a key to its “unflinching commitment to building a company that is single-minded in the pursuit of enhancing the health of our members.”
“As Clover enters this new era of growth, we are restructuring some teams in recognition of our need for deep Medicare Advantage skill sets to continue propelling us forward to fully achieve our mission of improving every life,” it said in the statement.
Clover said part of its restructuring would include opening a new office in Nashville to recruit from the “pool of healthcare expertise” in that region.
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Its existing offices are in Silicon Valley and in New Jersey.
The tech-based insurance startup, which offers plans across seven states, has some big-name investors, including Google parent company Alphabet. Investors have contributed $425 million all told into the company.
However, despite being valued at about $1.2 billion and having notable backers, it’s struggled to turn a profit. In 2017 Clover lost $22 million, down from $35 million in 2016 losses.
The staffing issue is a common one that tech-first healthcare companies run into, Ari Gottlieb, a principal at A2 Strategy Group, told CNBC.
“These venture-backed health insurance start-ups are realizing that they do need healthcare experience, as it’s one of the most complicated, regulated, nuanced parts of the economy,” Gottlieb said. “They’re competing with the established health plans, which can also invest in tech.”
Despite these challenges, Clover is forging on with its business. It added six new cities to its coverage map for 2018.