Cerebral, the embattled online mental health startup, is cutting approximately 20% of its staff.
A spokesperson for Cerebral confirmed the company made layoffs to increase operational efficiencies, but declined to confirm the number of jobs cut. The Wall Street Journal, which first reported the layoffs, said Cerebral is cutting 20% of staff across the board.
It is the second significant layoff this year for Cerebral. In June, the company restructured its operations and eliminated a number of positions, although it did not specify how many.
The company, which received $300 million in funding last December, has had a difficult year.
Download Modern Healthcare’s app to stay informed when industry news breaks.
Cerebral received a grand jury subpoena from the U.S. Attorney’s Office for the Eastern District of New York on May concerning an investigation into “possible violations of the Controlled Substances Act” related to how it prescribed medication for attention-deficit/hyperactivity disorder. Three days before the subpoena, the company suspended prescribing Adderall and Ritalin to new patients. A spokesperson for the company said, "no regulator has accused Cerebral of any wrongdoing or violation of any law."
In June, the U.S. Federal Trade Commission reportedly sent a letter to Cerebral requesting information on whether the company has continued to charge patients even after they’ve attempted to cancel their subscription. According to a separate report in June from The Wall Street Journal, the FTC asked Cerebral to preserve relevant documents.
In mid-May, Cerebral’s founder Kyle Robertson was forced out and replaced by Dr. David Mou, who previously served as the company's president and chief medical officer. The mental health startup has also been sued by at least three former employees, including a former vice president who alleges the company fired him for speaking out against its unlawful business practices. The three suits are all pending.
This story first appeared in Digital Health Business & Technology.
