Capsule, an app-based pharmacy startup that hit unicorn status last year, initiated layoffs this week, joining the reams of health-tech startups that have been slashing headcounts to adapt to market uncertainty after a year of record-breaking venture capital funding.
The cuts affected 13% of the company's workforce, said one former employee who was part of the layoffs. Software engineering, product, sales and marketing, operations and expansion growth were among the affected departments, according to LinkedIn posts and a public spreadsheet that employees started to connect one another to new job opportunities. The company employed 938 workers as of May, according to Pitchbook.
Capsule, which is based in Tribeca, did not immediately respond to emails and calls requesting comment on the layoffs and specific details about the departments and number of employees affected. Crain's will update this article if the company responds.
The former employee, who asked to remain anonymous, said higher-ups had been "adamant" about cutting costs across the board in the weeks leading up to the layoffs, seemingly foreshadowing what was to come. But the employee said they were given minimal information about the reason for the layoffs.
“They didn’t give much context; they just said the company is strategically aligning,” the former employee said. “They laid off a lot of expansion people, which kind of tells me that their expansion plans are not going as planned."
Capsule has raised at least $570 million since it was founded in 2015. Last year it closed a $300 million Series D financing round that its chief executive said valued the company at more than $1 billion, a milestone that earns startups the colloquial title of unicorn.
The layoffs add Capsule to the growing list of digital health startups that have made similar cuts in recent weeks in an effort to manage expenses during the market downturn, such as weight loss telehealth platform Calibrate and virtual care startup Ro, both based in the city.
Venture capital has been harder to come by this year, after 2021 brought record fundraising for digital health and health-tech startups in the city and elsewhere.
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