Weight-loss telehealth company Calibrate Health Inc. said it cut 18% of jobs as it pivots its business model amid growing competition.
The changes come as Calibrate is transitioning from offering obesity drug prescriptions to the general public to becoming a service that big companies partner with to provide benefits to their employees.
“Calibrate is accelerating our transformation into an Enterprise-first business,” the company said in a statement. “We will continue to grow our direct-to-consumer business responsibly.”
The cuts are the New York City-based startup’s second round of job cuts in nine months. The latest wave affects around 100 people, according to two former employees who asked not to be named while discussing internal matters. Calibrate declined to say how many people were affected.
Founded in 2019, Calibrate was early to offering patients digital consultations for buzzy new obesity medications like Novo Nordisk A/S’s Wegovy and its diabetes drug Ozempic. The medications mimic a hormone that helps people feel full.
The obesity telehealth space has now become crowded, with dozens of companies providing similar services, including Roman Health Ventures Inc., also known as Ro, and Sequence, the consumer brand of Weekend Health Inc., which WW International Inc. recently purchased. The platforms often provide prescriptions alongside coaching and support for lifestyle changes such as better diet and exercise.
Obesity drugs are pricey — Wegovy costs around $1,400 a month — and health insurance coverage is scant, presenting a challenge for both startups and patients.
At one point in early 2022, about a fifth of Calibrate’s customers were accessing weight-loss medications through a coupon program offered by manufacturers including Novo Nordisk. Wegovy’s coupon program only lasted for six months. When coupons expired, some customers were put on other medications, while others faced a choice between paying the full cost of the drug or stopping therapy.
Novo ended new enrollment in the coupon program in late 2021. Working directly with employers, as Calibrate is now doing, can lead to better insurance coverage and access than in a direct-to-consumer model.
During the last round of layoffs, in July, Calibrate cut about 24% of its workforce, or around 156 employees. Chief Executive Officer Isabelle Kenyon said at the time that the company was accelerating its path to profitability.
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