Athenahealth will lay off 9% of its workforce, the company announced in its third quarter earnings report Thursday. That translates to more than 400 people.
The cuts are part of an "organizational redesign" intended to simplify the cloud-based EHR vendor's structure and make the company more efficient and accountable, according to the earnings report.
The layoffs are part of the company's broader push to save $100 million to $115 million by the end of 2018. Besides shrinking the workforce, the company will also adjust its marketing program and close offices in San Francisco and Princeton.
The company's shares dropped 3.6% during trading on Thursday, and another 3.4% in after-market trading shortly after the announcement.
Athenahealth reported $304.6 million in revenue for the third quarter of the year, a 10% increase over last year. In 2016, the number of contracts Athenahealth has with small hospitals more than doubled, according to KLAS. Still, with 1.6% of the acute care hospital market, the company is still at the low end of market share compared to the other big-name EHR vendors like Epic and Cerner.