Carbon Health, a primary care startup that combines software with in-person clinics, said Thursday it had laid off 250 employees.

“For the last few years, we have been more focused on topline revenue growth, patient acquisition, patient retention and service expansion, and we have been less focused on profitability,” cofounder and CEO Eren Bali wrote in a statement. “While that was the right decision in 2020 and 2021, the macro environment with more volatile capital markets means it is vital that we become less focused on growth and more focused on profitability.”

San Francisco, California-based Carbon has raised more than $500 million to date, including a $350 million round in July 2021 at a $3.3 billion valuation. The round was led by Blackstone’s Horizon platform. Other investors include Atreides, Homebrew, Hudson Bay Capital, Fifth Wall, Lux Capital, Silver Lake Waterman, and BlackRock, Dragoneer Investment Group and Brookfield Technology Partners.

Bali said the layoffs represented around 8% of the company’s global workforce. Through an outside PR firm, The Hatch Agency, Carbon Health declined to specify its total workforce. The company also would not comment on the jobs that were affected. Carbon Health held a staff meeting on Wednesday to inform employees of the layoffs. The downsizing is believed to mostly affect people who work for corporate headquarters rather than the clinical staff who treat patients, according to several employees who attended the meeting and requested anonymity as they are required to sign a non-disparagement and confidentiality clause as part of their severance package. As of Thursday afternoon, Carbon Health’s website still said the company was hiring for 347 open roles, which all appeared to be clinical in nature, including physicians, advanced practice clinicians and clinic support.

Carbon saw significant growth during the Covid-19 pandemic as it administered millions of Covid-19 tests and vaccines. Bali said the layoffs were partly to blame on some of the Covid-related business winding down. “As Covid is entering a new phase, we are winding down some of those Covid-specific lines of business and that, unfortunately, means parting ways with some colleagues,” he wrote.

Bali cofounded Carbon Health with Caesar Djavaherian, an emergency medicine physician who formerly owned several Bay Area urgent care clinics, in 2018. Bali is also the cofounder and chairman another tech unicorn, the online learning platform Udemy.

“One of my guiding principles when I started Carbon Health was to ‘assume karma exists.’ I wanted to make sure we could live that value in the bad times as well as the good,” Bali wrote in the statement, saying this included “generous separation packages.”

The 250 affected employees will not be required to work after June 1, but will remain Carbon Health employees and be paid through July 31, according to a copy of the separation agreement obtained by Forbes. The company will continue to pay health insurance premiums for COBRA coverage for an additional four months through November 2. Carbon Health also removed equity cliffs, meaning employees who have not hit the one-year vesting mark for stock options, will receive the options they have accrued so far and can exercise them until October 29.

Update: This story was updated at 3:46pm to include more details on the layoffs and separation agreement.


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