Two prominent healthcare AI firms have announced workforce cuts this week as part of broader industry realignment. Abridge and Heidi each cited strategic restructuring as the reason for reducing staff, while emphasizing continued investment in product development.
Abridge announces workforce realignment
The company confirmed an “organization-wide realignment” on Friday, saying it was restructuring to “flatten our organization and build and deliver products faster.” No specific headcount figure was disclosed.
Founded in 2018, Abridge has raised more than $750 million in venture capital. It now works with over 300 health systems and expects to support more than 100 million clinical conversations this year, according to its internal projections.
Abridge said it was supporting staff impacted by the cuts with “meaningful transition packages and outplacement transition support.”
The company emphasized that it remains “very well capitalized” and retains “a majority of the capital it has raised to date.” Executives indicated that hiring will continue in priority areas, especially those tied to new product opportunities.
Heidi trims 18% of staff amid restructuring
Heidi’s CEO and co-founder Tom Kelly disclosed on LinkedIn that the startup reduced its headcount by 18%. With a workforce of more than 600 employees, the layoff impacts roughly 108 staff members, though the company did not specify which roles were eliminated.
Initially launched in Australia as an ambient AI medical scribe, Heidi now offers point-of-care clinical guidelines, AI hardware, and a voice-to-text feature called Dictate. The platform currently supports around 2.8 million patient interactions each week across 110 languages in 190 countries.
In September, Heidi secured a combined $340 million financing package, including a $100 million Series C round and a $240 million growth investment led by General Catalyst’s Customer Value Fund. The capital is intended to fuel expansion beyond documentation into workflow automation.
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While the cuts are painful, the leadership believes they are necessary to “continue growing quickly and deliver on our plans for next year.” Kelly noted that the company is consolidating R&D under a single roadmap and moving customer support functions into product teams.
Two of Heidi’s three co-founders are preparing to depart. Waleed Mussa will leave to spend more time with family, and Lu Yui will transition to an advisory role focused on models and hardware through the end of March next year. Their exits are part of the broader restructuring effort.
Children’s Mercy, a pediatric health system based in Kansas City, Missouri, confirmed it is cutting 115 positions, or about 1.2% of its total workforce. The organization attributed the decision to “rising costs and reimbursement that has not kept pace.” Among those affected, “most are non-clinical administrative, leadership and support roles,” the statement reads.
Other healthcare layoffs
Concurrent with the cuts was word that 473 of the system’s revenue cycle and scheduling employees are shifting over to revenue cycle management vendor Ensemble, where they’ll continue to work with Children’s Mercy. In April, the children’s hospital announced plans to build a new acute patient tower at its flagship location in response to “increasing demand for highly specialized pediatric care as general hospitals nationwide reduce pediatric capacity.”
Montrose Regional Health, a rural Colorado nonprofit, announced a restructuring that eliminated 77 positions. Of these, 43 were vacant and 34 were filled by current employees. Nearly half of the total positions were direct patient care roles, and 12 were leadership. The system said its volumes have grown about 10% over the past year while commercial reimbursement stayed flat and expenses rose.
City of Hope filed a Worker Adjustment and Retraining Notification outlining plans to permanently lay off 73 employees, effective Nov. 24. The organization said most of those affected work in business support and will receive support services like transition benefits and severance. Kaiser Permanente is laying off 147 workers across multiple Northern and Southern California locations, with the reductions effective on Nov. 20.
SAC Health, a San Bernardino nonprofit chain of clinics, laid off 52 more workers shortly after a prior round of 49 cuts. The changes were reported in a Worker Adjustment and Retraining Notification filing and described the decision as necessary to strengthen operations. Catholic Health is eliminating 40 positions across five of its locations and realigning 34 other roles, according to a Sept. 22 press release shared with Fierce Healthcare.
