Medical health insurance marketplace GoHealth has said it is going to lay off about 800 employees, with roughly 100 of the reductions occurring in Chicago.
The cuts represent 20% of its workforce and are available as the corporate has struggled to manage costs despite seeing revenue growth, totally on commissions from selling Medicare-related policies. In June, GoHealth shook up its top management, bringing in outsiders as CEO and chief financial officer. At the identical time, two co-founders moved from day-to-day responsibilities to roles on the board of directors.
The reductions come just ahead of its announcement of its second-quarter earnings, expected Monday. Amid expectations of a recession and investor pressure for higher results, many technology firms have cut jobs or at the very least scaled back hiring plans.
Monday, Groupon said it was cutting 500 jobs, most of them in Chicago, because it reduces its headcount by 15%.
The GoHealth cuts were announced in a message to employees from CEO Vijay Kotte posted Tuesday. “We fully recognize how unsettling this news shall be for impacted team members and people of you who will remain on our team after today,” Kotte said. “Please know that this decision was not made calmly. It was only after an exhaustive evaluation of our business needs and extensive consideration that we agreed this was the trail forward to secure our long-term future and enable GoHealth to attain its full potential.”
He said the corporate will help employees with outplacement, reminiscent of by allowing them to retain company-issued laptops used while working from home and releasing staff from noncompete agreements. Affected employees will get a minimum of 60 days’ severance with advantages, he said.
Kotte’s message didn’t disclose the variety of layoffs. An organization spokesperson provided that information. GoHealth’s headquarters is at 214 W. Huron St.
The spokesperson said, “We’re grateful for our departing team members’ contributions and focused on fully supporting them on this transition.Further, with the transformational steps we’re taking, we’re confident that GoHealth is well positioned to succeed. We sit up for sharing news of such successes over the approaching months and years.”
The corporate was founded in 2001 and started selling shares to the general public in 2020, initially at $21 each. They traded Thursday at just 63 cents, having lost greater than 80% of their value this 12 months.
In its most up-to-date earnings report, covering the primary quarter, GoHealth said it lost $37.2 million, compared with a lack of $7.3 million for a similar period in 2021. Revenue, nonetheless, rose 33% to $270.6 million.
The CEO on the time, co-founder Clint Jones, said he was pleased with the outcomes because the corporate was executing its technique to “slow our growth and optimize the client experience.”
Only a month later, GoHealth announced Kotte would replace Jones, who took a latest post as executive chairman of the board. Co-founder Brandon Cruz also moved from operational roles to develop into non-executive chairman.