Youth and family mental health startup Brightline announced layoffs for 20% of its workforce last week.
This is the second round of layoffs in recent months for the Palo Alto, California-based company. In November, 2022 Brightline announced a layoff that would impact 20% of its workforce.
This latest move by Brightline comes after a wave of layoffs in behavioral health near the end of 2022 that was largely concentrated in the startup and tech-focused segments of the industry.
A Brightline spokesperson said the company cut corporate roles to accommodate more clinical and patient-facing positions. Social media posts show that the layoffs impacted user experience, human relations, tech and operations roles.
“This decision was not taken lightly, and although incredibly difficult, it will ultimately allow us to better serve our clients and provide even more families with the mental healthcare support they deserve,” the spokesperson said in an email.
Brightline has secured substantial venture capital funding since it launched in 2019. It has raised about $212 million, according to Crunchbase data.
In November, Brightline told Behavioral Health Business that the layoffs were meant to prepare the company for the future. So far, that future has consisted of banking woes, a downturn in venture capital investment in digital health and continued evidence of worsening behavioral health trends among American youth.
An analysis from Trilliant Health shows eating disorders are up 107% while depression is up 44% among pediatric patients. There is a shortage of behavioral health providers generally, but an even worse shortage for pediatric providers.
It isn’t clear where the disconnect falls between the huge national demand for pediatric behavioral health services and the services that Brightline provides.
Naomi Allen, CEO of Brightline, told BHB in a previous article that a critical challenge in addressing pediatric mental health issues is low payer reimbursement rates, the need for schools to partner with expert organizations such as Brightline and increased screening for pediatric conditions.
“But the reality is, many pediatricians either don’t have the time to do effective screening or if they screen, they don’t have a place to then send those kids because there is such a dearth of clinicians,” Allen previously said. “I do think there’s a real need for us to disrupt that and create better tools and resources and incentives for screening, but then also create really smooth referrals and workflows so that those pediatrician-identified kids have a place to go.”
The company has added to its leadership team this year. In April, the company hired Myra Altman as chief clinical officer.
The layoffs aren’t the only headwinds the company is facing.
Brightline is also party to the Clop ransomware gang hack of Fortra’s GoAnywhere file transfer software. Clop initiated a mass ransomware attack in January, according to a TechCrunch report. Brightline has acknowledged the data breach.
It informed patients of the breach on April 7, with an estimated 27,742 people impacted, according to the Maine attorney general’s office.
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