The leaders of Cerebral Inc. reportedly told employees that the company grew too fast and that it’s now pulling back on growth to get onto a sustainable trajectory.
On Monday, top executives of Cerebral — including President Jessica Muse and CEO David Mou — held town hall meetings with employees as part of the communication effort for its 20% workforce reduction. Business Insider reported on those meetings on Wednesday.
Last week, Behavioral Health Business obtained an email sent to employees by Mou announcing the layoffs.
During the meetings, the executives reportedly told employees that Cerebral capitalized on temporary regulations on prescribing medication to maximize patient acquisition and retention. But now, demand has faltered following Cerebral’s decision to stop prescribing controlled substances after months of scrutiny, including a civil lawsuit by a former executive, federal investigations, a congressional probe, and insurers and pharmacies re-evaluating their work with Cerebral.
Cerebral announced it would stop prescribing most controlled substances in May, effective Oct. 15.
Muse, according to Business Insider, said during a town hall meeting that the company spent more on advertising than it has been able to make as a result.
Muse and Mou pointed to federal COVID-era flexibilities for prescribing certain medications via telehealth ending as the motivation for shutting down controlled substances. However, those federal flexibilities remain in place today.
While some Cerebral employees were critical of the company’s approach to business, Muse, according to Business Insider, pushed back against greed as a motive. She cited the practice under former and founding CEO Kyle Robertson to help patients even if it wasn’t profitable.
The company has now shifted its focus to “very sustainable smart growth,” Muse said, according to Business Insider.
Additionally, Cerebral leaders cited mounting economic pressures as the reason the startup is enacting spending reductions. These include staff reduction, reducing the number of company retreats and sunsetting certain programs such as care counseling, coaching and weight management. A source confirmed those details to BHB.
Cerebral confirmed last month it would stop offering coaching and care counseling services. At that time, it didn’t answer further questions about layoffs.
Management held three meetings on Monday — for corporate staff, support staff and clinical staff.
Business Insider also reported Cerebral scrapped its clinical trials and plans to expand into the United Kingdom.
Robertson founded Cerebral in 2019. Mou replaced Robertson in May. Muse joined the company in April 2020 as chief operating officer and became president at the time Mou became CEO.
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