Amidst mounting fears of a recession, Bengaluru-based healthtech and fitness business HealthifyMe is the most recent company to lay off staff members. 150 workers, or 15-20% of its overall workforce, has been let go by the business, sources told Inc42. Employees in SME (subject matter expert), quality analytics, product, and marketing jobs have been impacted by the decision. 

Highlights:

• HealthifyMe, a Bengaluru healthtech startup, lays off 150 employees (15-20% of workforce) amid recession fears.
• Affected employees receive two-month severance pay and extended medical coverage.
• Despite previous funding, the company faces financial pressures, with an 8X increase in net loss and attempts to acquire competitors.

The startup will provide affected employees with additional medical coverage in addition to a two-month severance compensation.

The startup confirmed the news with Inc42 and stated in a written statement, "We have had to take the difficult decision to let go of 150 of our team members." Like a lot of tech, growth hasn't kept up with recruiting and expectations.

"Despite a comfortable runway, it made sense for us to steer towards profitability in light of this and shifting market circumstances. We will provide two months' pay severance with two weeks of annual service at HealthifyMe, vested stocks until March 2023, medical insurance continuation until June 2023, counseling, and outplacement help as part of our severance and support to individuals impacted, it continued.

Almost 1.5 years after the business secured $75 million in a Series C fundraising round, there have been layoffs. LeapFrog and Khosla Ventures led the financing back then.

Participating in the round were HealthQuad, Unilever Ventures, and Elm in addition to current investors Chiratae Ventures, Inventus Capital, and Sistema Asia Capital. The business has garnered $100 million in funding thus far over many rounds.

The firm has a cash surplus that will last them till 2024, according to sources. According to people familiar with the situation who asked to remain anonymous, the firm is trying to buy out smaller competitors in the same industry. Tushar Vashisht and Sachin Shenoy launched the business in 2012. Shenoy has taken a vacation from supervising the operations, but Vashisht still manages the company's daily operations. Shenoy is said to be on a break on his LinkedIn page.

The company had an 8X increase in net loss from INR 19 Cr in FY21 to INR 157 Cr in FY22. Sales-wise, the startup's overall operating revenue in FY22 was INR 185.2 Cr, up from FY21's INR 86 Cr.

With the layoffs, HealthifyMe is now the seventh healthtech startup for this year. Previously, staff members had to be let go from MFine, Innovaccer, Breathe Well-being, and PharmEasy's Docon. 16,933 workers have been let go by Indian firms, including HealthifyMe, according to the Inc42 layoff tracker as of 2022.