Headspace Health, a digital mental health ‘unicorn,’ laid off 181 employees, or 15% of its staff, on Thursday.
The cuts will help Headspace pave a path to profitability, the company said in a statement. This is Headspace’s second round of layoffs in the past year, as it cut 50 employees in December.
Headspace offers mediation content, behavioral health coaching, therapy and psychiatry services directly to consumers as well as to employers and health plan customers. Headspace Health CEO Russell Glass told Modern Healthcare in November that inflation and economic headwinds had created challenges for the consumer landscape for subscription services.
“Consumers are struggling. They’re facing inflation, economic headwinds and they have increasing mental health needs,” Glass said. “We’re looking for different ways to reach them that reduce their out-of-pocket costs, which is why our health plan deals are so important.”
Headspace Health came together when Headspace and Ginger merged in August 2021 in a deal valuing the combined company at $3 billion at the time.
As the digital health funding market has shifted downward, some companies once deemed unicorns have had to lay off employees, sell lagging businesses and even file for bankruptcy. Some are pivoting to new product lines while others forge ahead.