Health Tech Startups Face Unexpected Layoffs Amid Coronavirus Economic Fallout
Despite high demand for digital health tools during the pandemic, health tech startups are furloughing and laying off workers due to the broader financial meltdown. Virta Health confirms it is cutting staff to weather the economic uncertainty caused by Covid-19.
Health tech startups are experiencing a wave of furloughs and layoffs as the coronavirus pandemic triggers a severe economic downturn. These cuts demonstrate that the digital health sector, despite offering services that are in high demand during the crisis, is not immune to the widespread financial meltdown.
Diabetes coaching company Virta Health confirms it is laying off an undisclosed number of employees, primarily from its commercial organization. The San Francisco-based startup, which was last valued at $538 million, attributes the difficult decision to the radically changed external economic environment caused by Covid-19.
Virta Health states that its recent funding and virtual care delivery model position it well for the future, but leaders believe the reductions are necessary to navigate upcoming economic uncertainty. The situation highlights how even well-funded health tech companies are taking proactive steps to preserve capital during the global crisis.