Behavioral Health Startups Foresight, Headspace, SonderMind, Eleanor Lay Off Staff

Additional reporting by Chris Larson

A slew of behavioral health startups have laid off employees.

These startups, many of which have raised tens of millions of dollars in the last year, include Foresight Mental Health, Headspace Health, SonderMind and Eleanor Health. This comes as venture-backed organizations on the whole continue to scale back in the face of new economic headwinds.


“They have to be much more thoughtful about capital efficiency, particularly as it relates to technology costs, but operations costs and headcount in general,” BBG Ventures Managing Partner Nisha Dua previously told Behavioral Health Business.

Foresight makes further job cuts

This is Foresight Mental Health’s third round of layoffs this year. In total, the behavioral health provider cut two-third of its administrative team, or 327 positions, in 2022. The most recent layoffs account for 40 of those jobs.

Foresight CEO Greg Serrao said that the reductions are aimed at making the company financially sustainable.


“When I arrived in April, we had 487 administrative staff to 520 clinicians. A ratio of nearly one administrative person to one clinical person is unheard of in health care services,” Serrao told BHB in an email. “It simply is not sustainable. We needed to reduce headcount and completed two reductions in force, one in July and one in September. Those reductions reduced the administrative headcount to 200.”

Following the December layoffs, the company now has 160 administrative employees – a number that Serrao said is “sustainable.”

The administrative reduction was made possible in part by the company’s new practice management system, according to Serrao. The system includes an electronic health record (EHR), plus billing and collections information.

“Prior to this new system, the company needed to rely on manual processes to connect one system to another system and therefore threw bodies at issues rather than find a technological solution that would allow the company to scale with much fewer administrative staff members,” Serrao said. “The new system we implemented is enabling us to streamline processes and be much more efficient.”

Founded in 2017, Foresight offers in-person and virtual mental health services. The company closed a Series C funding round this summer. The terms of the funding were not disclosed. Foresight has nearly 40 offices, according to Serrao.

The reductions are part of the company’s larger strategy to reduce cash burn. According to Serrao, the company’s monthly cash burn is down by 67% from April 1.

“Foresight is a much different company today than it was in April,” Serrao said. “While we continue to receive 3,000 new appointment requests per month and provide nearly 40,000 sessions per month, we are doing so with 68% less administrative staff. We have redesigned nearly every functional area and every business process.”

Headspace’s ‘last resort’

Headspace Health has cut staff by 4%, according to Bloomberg. That comes out to roughly 50 positions in total.

“With the privilege of supporting the mental health and wellbeing of millions around the world, also comes great responsibility to focus on the health of our business and to protect us for the future,” a Headspace spokesperson wrote in an email to BHB. “We implemented preemptive cost savings initiatives earlier this year, but we’ve always viewed a reduction in force as an absolute last resort given the very real and deep impact on our employees’ lives. We are taking this step to equip Headspace Health as a long-term, sustainable business that can weather various economic environments while continuing to execute on our mission. It’s worth noting that our Care Team was not impacted by this reduction.”

Headspace Health was formed in 2021 after virtual behavioral health company Ginger and mental wellbeing startup Headspace merged. At the time, the combined company was valued at more than $3 billion. Since the acquisition, the company has launched its unified behavioral health offering and made a number of acquisitions, including Shine and Sayana.

While this is the first reported layoffs for Headspace this year, its main virtual mental wellness competitor, Calm, laid off 20% of its staff, or about 90 people, this summer.

SonderMind seeks profitability

Headspace Health wasn’t the only behavioral health unicorn to cut jobs this winter. SonderMind, tech-backed mental health provider, laid off 15% of its staff, or about 50 people, the Denver Business Journal first reported. 

SonderMind CEO and co-founder Mark Frank said the layoffs are in an effort to move towards profitability.

“SonderMind’s mission to increase access, expand utilization and improve clinical outcomes in mental health is always our top priority,” Frank said in an email to BHB. “Given the current economic conditions, we made the decision to accelerate our path towards profitability, in order to ensure we can remain independent and continue delivering high quality, technology-assisted mental health care. As part of this decision, we needed to make changes to teams and roles, which meant taking the difficult step of letting go of some of our colleagues.”

This news comes shortly after SonderMind acquired mental health management app Total Brain for an undisclosed amount.

Founded in 2014, SonderMind has gained investor interest over the last few years. In 2021, it closed a $150 million Series C funding round, which brought its total amount raised to $183 million.

SonderMind employees impacted by the layoff were provided seven weeks of severance pay plus two weeks for every six months at SonderMind. The company has also agreed to pay three months of full premiums for COBRA health care coverage.

Eleanor trims staff

Lastly, addiction treatment provider Eleanor was also impacted by layoffs. Multiple sources told BHB the layoffs impacted roughly 18% to 20% of the startup’s staff. BHB was unable to confirm that range with Eleanor, and the company has not responded to a request for comment.

The Waltham, Massachusetts-based provider uses a population health approach to treating substance use disorder (SUD). Its services include medication-assisted treatment, psychiatry, therapy and coaching services.

This news comes less than a year after the startup announced a $50 million Series C funding round, which brought the company’s total raise to about $82 million.

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