Olive AI Inc. cut 450 jobs on Tuesday and pared its product lines to core billing automation software that represents 80% of its revenue, announcing the move in an all-staff email that the company also shared with Columbus Business First.
About 850 employees remain nationwide, the company confirmed. Olive had grown to 1,300 employees after hiring 250 since the start of the year, but instituted a freeze in early June.
Olive still plans to renovate the former Anthem campus in Worthington as a new headquarters, but will spend less than planned at first, it said in written responses to questions.
Just over one year ago, Olive raised $400 million at a $4 billion unicorn valuation, the largest VC round at the highest valuation in Ohio history. In 2020 it had raised $384 million. Over its lifetime the total is $848 million.
Founder and CEO Sean Lane told staff the company's own "missteps" were compounded by the downturn in the economy this year.
"Olive’s values of 'choose vision over status quo' and 'act with urgency' drove us to make significant investments across the most pressing parts of healthcare, scale our teams and move quickly to bring solutions to the market," Lane said.
"Our fast-paced growth and lack of focus strained our product and engineering resources and prevented us from executing quickly on key initiatives. I take responsibility for this."
Without giving specifics, the company said in its written response to Business First that the new strategy will result in "some changes to the roles and responsibilities of our executive team."
Instead of pouring resources into growing market share and tackling clinical decision-making and other challenges through artificial intelligence, Olive will focus on core products: automation for determining insurance coverage and billing for some 950 hospital clients, and utilization management for health insurers (the series of decisions leading to whether a procedure should be covered because it's backed by medical evidence).
"They are the foundation upon which Olive can continue to drive transformational value for the entire healthcare ecosystem," Lane's message said. "And our expectations are still high for what we can achieve – we remain deeply passionate about solving healthcare’s biggest problems. Today’s announcement means we will get more precise with how we do that in the short term."
The company told Business First it has the capital needed to execute the new strategy "for the foreseeable future."
Some full teams will be cut and there will be contractions in sales, product management, customer service and engineering.
"This is the most difficult decision I’ve had to make as CEO," Lane said in a statement to Business First. "But I make it knowing this is the right strategy for us to deliver on Olive’s mission."
Affected employees lose their jobs immediately but will be paid for 10 weeks, plus two weeks' pay per each year of service greater than one year. Health and other benefits continue through the end of September. Olive is providing outplacement services and a hiring hub from portfolio companies of the company's investors.
"I’d like to express my sincere gratitude for everything you’ve done for Olive," Lane told staff. "We wish you the best and are committed to providing you with resources to help you move forward."
More than 350 tech companies have terminated or laid off 53,000 employees so far this year amid inflation, rising interest rates and slowed VC investments, according to the website layoffs.fyi.
Olive's is the largest restructuring to hit Central Ohio, and the fourth in the Drive Capital portfolio. Root Inc. cut 330 jobs in January, and there were smaller cuts at Circulo Health (an Olive offshoot that Lane also founded and leads) and Finite State.
One of Drive's first investments when the venture firm was founded in 2013, Olive has gone through several iterations and ups and downs. In 2018 it sold off all of the legacy products and intellectual property developed under its former identity as CrossChx, going all in on robotic process automation to eliminate administrative waste in healthcare.
As Olive, it started doubling and tripling sales annually, surpassing 1,000 employees last September with plans to top 1,600 this year.
