Health insurance marketplace GoHealth has announced it will lay off about 800 employees, about 100 of them in Chicago.
The job cuts represent 20% of the workforce, as the company struggles to control costs, primarily from commissions from selling Medicare-related policies, despite seeing revenue growth. In June, GoHealth shook top management and brought in outsiders as CEO and CFO. At the same time, two co-founders transitioned from day-to-day operations to board roles.
The cut comes just ahead of the second-quarter earnings announcement scheduled for Monday. With the prospect of a recession and investor pressure for better results, many tech companies are cutting headcount, or at least scaling back hiring plans.
On Monday, Groupon announced it will cut 500 jobs as it cuts headcount by 15%. Most of them were in Chicago.
GoHealth’s cuts were announced in a message from CEO Vijay Kotte to employees posted Tuesday. “We are fully aware of how disturbing this news will be for affected team members and for everyone who remains with our team from today onwards,” Cotte said. “Please know that this decision was not made lightly. After a thorough analysis and due consideration of our business needs, we believe this will secure our long-term future and that GoHealth We agreed that it was a path to help us reach our full potential.”
He said the company will help workers relocate, including by keeping company-issued laptops used while working from home and by freeing employees from non-compete obligations. Affected workers will get a minimum of 60 days of severance and benefits, he said.
Kotte’s message did not disclose the number of layoffs. A company spokesperson provided the information. GoHealth is headquartered at 214 W. Huron St.
A spokesperson said: We look forward to sharing news of such successes in the months and years to come. ”
The company was founded in 2001 and went public in 2020. Initially he was $21 per share. They traded for just 64 cents on Thursday.
In its latest earnings report covering the first quarter, GoHealth said it lost $37.2 million, compared with a loss of $7.3 million for the same period in 2021. However, his earnings increased 33% to $270.6 million.
CEO and co-founder Clint Jones at the time said he was pleased with the results as the company was implementing a strategy of “slowing growth and optimizing the customer experience.”
Just a month later, GoHealth announced that Kotte would succeed Jones as chairman of its board of directors. His co-founder, Brandon Cruz, has also moved from an operational role to non-executive chairman.
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