Job loss | Health tech company once valued at $2.3bn lays off every single worker

Health tech company once valued at $2.3bn lays off every single worker

Cue Health, a diagnostic health platform, confirmed on Monday it would be laying off all its employees and closing its doors.

The company had filed a California Worker Adjustment and Retraining Notification (WARN) notice earlier in May announcing plans to lay off 189 workers from July 1, the San Diego Union Tribune first reported.

However, in an update to the paperwork on Monday, CHRO Allison Blackwell reported all 218 remaining employees would be laid off effective from Friday, May 24, including company leadership.

“On May 24, 2024, the Company will be issuing final paychecks to all employees,” Blackwell wrote in the filing. The final paycheck will include the compensation and benefits each employee would have earned until July.

Once a highly successful supplier of COVID-19 test kits to Google, NASA, Netflix, and the NBA, the embattled employer has conducted a series of layoffs since January 2023.

Most recently, Cue laid off 230 employees – around half of its company – in a bid to trim costs.

“Due to the fluid nature of this situation and based on the information available at this time, the Board of Directors of Cue Health has determined that the affected employees’ employment will conclude effective May 24, 2024,” Blackwell wrote.

“Similarly, the Company is concurrently informing all remaining US employees that their jobs are affected, and, as such, every remaining U.S. employee who has not yet received a WARN Notice, including Company leadership, is receiving a WARN notification today.”

As recently five months ago, the company achieved third-party recognition for its HR practices. In January 2024 it was recognized by the Human Rights Campaign Foundation’s Corporate Equality Index with an “Equality 100” award, a national benchmarking tool measuring policies, practices, and benefits pertinent to LGBTQ+ employees.

“I have such a heavy heart,” Cue Health’s Director of Internal and Executive Communications, Rachel Rudo, wrote in a post on LinkedIn. “Because everyone’s time at Cue is coming to an end.”

Leadership changes & layoffs failed to salvage Cue’s financial performance

The company had enjoyed accelerated growth thanks to the demand for its test kits, scaling rapidly from 99 workers in January 2020 to 1515 full-time staff by December 2022. This product pushed Cue to a $200million Initial Public Offering (IPO) in 2021, with a market cap of $2.3billion.

With demand for COVID-19 test kits waning, the company struggled for profitability, losing $373million in 2023 alone.

Despite cost-cutting measures including rounds of redundancies, the company still struggled to develop and market new products to augment the dwindling demand.

Read more from us

The final nail in Cue’s coffin came in the form of a warning letter from the Food and Drug Administration (FDA), which told the company’s leadership to stop selling their COVID-19 tests, having discovered in an earlier inspection that a modification by Cue to the tests had comprised their reliability.

The FDA also urged health care providers to stop using the product and throw any tests away. “Do not use any Cue Health COVID-19 Tests for Home and OTC Use that you may still have,” the agency stated in an online notice. “Dispose of the entire test cartridge in the household trash.”

The Cue Health board earlier attempted to steady the ship in March, replacing veteran CEO and co-founder Ayub Khattak with another co-founder Clint Sever. In April, CFO Aasim Javed stepped down.

You are currently previewing this article.

This is the last preview available to you for the next 30 days.

To access more news, features, columns and opinions every day, create a free myGrapevine account.