Cerebral to Cut About 20% of Staff as Its Operations Shrink

Telehealth startup Cerebral Inc. told staffers it is cutting jobs and restructuring its operations in moves that will affect about 20% of its employees, shrinking the company to match patient demand and lower growth targets.

In a memo to staff on Monday, Chief Executive David Mou said the changes would be spread across all divisions, including headquarters, clinical-care teams and support staff. He said employees would be notified over the course of the week, according to the memo, which was viewed by The Wall Street Journal.

“These are challenging times for many companies,” Dr. Mou wrote. “In order to continue to work towards our mission, we have a duty to our patients to ensure our business is healthy and sustainable throughout challenging economic times.”

A Cerebral spokesman said the moves are part of the company’s efforts to streamline operations while giving priority to clinical quality and safety. He declined to say how many jobs were being eliminated from the San Francisco-based company.

Cerebral, which publicly launched its services in 2020, added millions of thousands of patients with social-media ads and quick prescriptions for attention-deficit hyperactivity disorder and other mental-health conditions, the Journal has reported. It raised hundreds of millions of dollars in venture capital and hired hundreds of nurse practitioners as contract workers to see clients.

Some of Cerebral’s practices have become the subject of investigations by the Federal Trade Commission and Justice Department. Cerebral has said it is cooperating with the investigations and has stopped prescribing most controlled substances to new patients.

The company has been making changes and scaling back in recent months. In May, Cerebral shared ways with Kyle Robertson, its chief executive, and promoted Dr. Mou, its chief medical officer, to lead the company.

In an email sent to employees in August, Dr. Mou said the company was reducing its marketing budget and shifting funding to improve clinical quality and safety. He said the company has been experiencing a reduction in patient appointments as the number of new patients declines.

Cerebral cut some contract workers, including nurse practitioners, earlier this summer, according to documents viewed by the Journal. In recent months, the company terminated scores of support staffers and shifted duties to a firm called ResolvedCX employing workers in the Philippines. The spokesman said Cerebral has been working with ResolvedCX since June 2020.

Earlier this month, Dr. Mou told staff the company would stop offering its care-counselling services to new patients. Dr. Mou said a minority of patients with access to care counselors are scheduling appointments with them, according to a memo reviewed by the Journal. He said the company would continue to offer the service to existing patients, but wouldn’t enroll new patients for the service as of the end of October.

The company has been employing care counselors to serve as something akin to wellness coaches or case managers. They aren’t required to have advanced degrees—unlike the company’s nurse practitioners and therapists, who can treat patients only in states where they are licensed. Cerebral generally charges less for sessions with care counselors than it does for sessions with therapists.

The Cerebral spokesman said the company is focusing resources on programs that are used more widely and the company hasn’t changed its mission to make mental telehealth care broadly available.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com and Rolfe Winkler at rolfe.winkler@wsj.com

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Appeared in the October 25, 2022, print edition as ‘Telehealth Startup Cerebral to Shrink Staff.’

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