Iris Telehealth laid off staffers just days after it announced the acquisition of a peer organization, innovaTel.

On Thursday, social media posts showed that the layoffs impacted marketing and talent acquisition middle management roles. On Tuesday, the Austin, Texas-based business-to-business telepsychiatry provider announced it had acquired innovaTel, once part of the company Quartet Health. 

“Iris Telehealth has and will continuously assess the company to ensure it is operating sustainably and responsibly,” Iris Telehealth CEO Andy Flanagan told Behavioral Health Business in a statement. “We appreciate all our colleagues, especially in the wake of difficult decisions.”

Flanagan did not answer questions about how many or which roles were impacted by the move. He added that the number of roles impacted was “limited” and that those who were impacted received “comprehensive transition support.”

In a previous interview, Flanagan told BHB that his company was performing well financially — profitable and growing quickly. Similarly, he added that Iris was “not taking on a business that is not profitable,” referring to the innovaTel.

“We’re being responsible, is my point: this is a natural consolidation of two like companies that have the same clinical focus and the same customer segment,” Flanagan told BHB. “So it’s been a long time coming [from] my point of view.”

In previous reporting, behavioral health leaders experienced with dealmaking said that mergers can lead to layoffs mostly limited to middle and top management roles. “Certainly, they don’t need two CFOs,” one expert said. Frontline health care roles are also fundamentally different from other frontline business roles; the value is in the employee as opposed to a product. This can lead to buyers going out of their way to try to retain these staffers.

Iris Telehealth is one of the largest telepsychiatry companies in the U.S. It specializes in working with other health care organizations, such as hospitals and government-defined health, such as federally qualified health centers. It offers both health care services and software services to establish telehealth and in-facility remote care programs.

In 2022, Austin, Texas-based Iris Telehealth raised a $40 million Series B round. The same year, it was identified as one of the fastest-growing companies in the U.S., more than doubling its revenue in the three years ending in 2021.