Digital health unicorn Truepill makes third round of layoffs in 2022

Truepill, a platform that helps other companies offer diagnostics, telehealth services and prescriptions, has made its third massive layoff in a series of downsizings, have sources told TechCrunch. The dismissal affected about a third of the company, or 175 people. The company did not respond to multiple requests for comment.

A source claims that the entire UK Truepill team has been made redundant, along with a significant part of the virtual pharmacy platform's product team. The data team has also been impacted, while the company's diagnostic and telehealth components – its core services – will receive only minor support going forward. The affected employees were informed that they had lost their jobs via a Zoom call, and some were told that severance details would be shared in the coming days.

The next chapter of Truepill will be the pharmaceutical operations portion of the business, a return to form after Truepill's frenetic COVID-19 product sprint. When Truepill first launched, it described itself as the AWS for pharmacies, powering companies like Hims, Nurx, LemonAID, and other direct-to-consumer healthcare brands.

Over time – and various funding cycles – Truepill saw an opportunity in the sale of diagnostic and telehealth services. Eventually, it expanded beyond direct-to-consumer brands to institutions such as healthcare plans, corporations, and life science providers.

Today's decision stands in stark contrast to how Truepill characterized its business a few months ago; while it appeared to be in an offending position, the company claimed to generate $300 million in revenue in 2021.

In an interview with those who remain employed at the company, sources say chief executive and co-founder Sid Viswanathan spoke about the need for the digital health company to raise a Series E round, or an extension of its Series D round, a $142 million tranche that closed in October 2021. Under this funding, Truepill was valued at $1.6 billion, officially entering unicorn territory.

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In April, Truepill halted ADHD drug prescriptions due to growing concerns about digital health. The service disruption impacted employees at Truepill's recently acquired adult ADHD treatment company, Ahead. Reports indicate that Truepill was the preferred pharmaceutical partner of Cerebral, which is under federal investigation amid allegations that employees felt pressured to prescribe drugs to customers.

In June, Viswanathan confirmed it had laid off an additional 15% of its staff, affecting 150 people. Viswanathan said in a letter that the company was "focused on defining a new healthcare category and growing revenues," but what was critical was that the company operate "with a new level of financial discipline and prioritization, ensuring the longevity of Truepill. both for our customers and for our teams.”

With today's layoffs, the company is focusing on the morale of the remaining staff. According to the sources, Truepill will now conduct merit surveys for all employees to ensure that everyone is paid adequately. In addition, the remaining employees will also benefit from two days of mental health. Viswanathan told staff he would send executives to meet employees face-to-face in small groups.

Just weeks before the Truepill layoffs, the company announced the hiring of Paul Greenall as Chief Commercial Officer, the first person to hold the position since its launch. In April, Truepill hired its first Chief Financial Officer, Ana Schrank.

Meanwhile, resources remain flowing for affected Truepill employees. A group of former Truepill employees at Slack shows that those affected by previous layoffs are struggling to get clarity on severance packages and access to medical coverage.

Current and former Truepill employees can contact Natasha Mascarenhas at natasha.m@techcrunch.com, or Signal, a secure messaging application, at (925) 271 0912.