Headspace Layoffs: What happened to headspace?

Headspace Layoffs

Headspace Health, a significant mental health and meditation app firm, said it is laying off 15% of its workforce. The 181 affected employees will be laid off as part of a more considerable firm initiative to achieve positive cash flow by 2024. This year’s cuts mark the company’s second round of layoffs. It fired about 50 employees, or 4% of the staff, in December 2022.

The layoffs at Headspace Health are a sign of the difficulties the tech sector is experiencing in the present financial situation. The business is still dedicated to offering its customers mental health services.

Rich Pierson and former Buddhist monk Andy Puddicombe created Headspace Health in 2010. More than 70 million people have downloaded the business’s meditation app. Let us know about the company in detail in this article.

About Headspace

Headspace is a division of Headspace Health. It is an English-American online meditation firm. It was established in London, England, in May 2010. With locations in San Francisco and London, its main office is in Santa Monica, California.

The company primarily conducts business through its online platform. It offers registered customers guided meditation sessions to cultivate mindfulness. Most of the information is made available via a paid subscription service model.

In the beginning, Headspace operated as an events firm. It hosted mindfulness seminars throughout London. Puddicombe and Pierson looked into creating a mobile app. They came up with this concept after receiving requests from attendees for a method to share these ideas. The Headspace app’s first version was released in 2012.

The business introduced Headspace Health in June 2018 to create meditation tools. These tools would be prescribed to treat a variety of chronic diseases. In an agreement valued at $3 billion, Headspace and the online mental health service Ginger united in August 2021. 

In 2020, the business’s subscriber base doubled. It was because of a global pandemic and a heated presidential election. These hurt Americans’ mental health. As Puddicombe’s voice guides users through guided meditation exercises and breath work, a happy orange face can be seen on several of the app’s products. For businesses, Headspace also provides an employee help programme. This is to offer workers benefits for their mental health.

The Headspace Meditation App fires 50 employees.

The popular mobile app’s creator, Headspace Health, eliminated roughly 50 workers in December 2022. It makes up 4% of their staff. This is the most recent internet startup to reduce its operations as funding becomes limited and economic growth slows.

Before removing the roles, the Santa Monica, California-based company had roughly 1,200 employees. Another meditation app that competes with Headspace is Calm. This company let go of around 20% of its 400-person workforce in August 2022. At the end of 2022, Calm had 135 million app downloads. This is according to the Business of Apps.

The company stated it was taking this action to “equip Headspace Health as a long-term, sustainable business. So that they can withstand various economic environments while focusing on executing their mission.”

Customers who were fearful and isolated turned to meditation apps like Headspace during the outbreak. Employees felt more pressure as the business grew. Some even claimed to have sought treatment to cope with the strain of working at the meditation app. This is according to a story published by Bloomberg in 2021.

Headspace said in September 2022 that it had purchased Shine. It is another app that offers information on meditation. Headspace and Ginger, which provide mental-health coaching through text messages, joined in 2021. After that, the combined company’s staff increased from 300 to over 1,000.

Since the merger, the company has acquired more startups focusing on mental health. They are Sayana, a developer of AI-enabled sleep and mental health tracking apps, and Shine App, a mental wellness platform. This was done with a focus on inclusive and culturally appropriate services.

The digital mental health startup said it would start providing its clinical care services to businesses in the United Kingdom. They planned to later expand to other foreign markets in 2023.

Second round of layoffs

Another 180 staff members have been let go by digital unicorn Headspace Health—many reports and messages on social media state this. According to the news, the most recent round of layoffs affected 15% of the organization. This news was released six months after the San Francisco-based corporation indicated it was eliminating 50 positions.

The economy has been affected by many issues. They are rising interest rates, expensive labour, and the conflict in Eastern Europe. Headspace is just one of several online behavioural health services that have scaled back.

The company “underestimated” how much the present economic situation would affect consumer behaviour. This is according to Chief Executive Russell Glass’s internal memo to staff. But he maintained that the company was “dedicated to being cash-flow positive in 2024.” So that they are based on something other than outside funding to support their members.

The business stated that “these changes will prepare the company for the future and create the way to profitability.”

According to Business of Apps, most of the cuts were made to the teams responsible for developing the content for Headspace’s meditation app. The app had been downloaded more than 70 million times as of 2022.

The internal memo also emphasized making new projects, such as an AI-powered journaling function, a priority for success in 2024. The CEO of the company informed staff of the recent layoffs. He says:

“Along with the honour of promoting the mental health and wellness of millions of individuals worldwide comes a significant responsibility. This is to pay attention to the wellbeing of our company and secure its future. On June 29th, we at Headspace announced a number of significant changes to our strategy and organizational structure. This includes a 15% reduction in the number of our employees. These adjustments will give the business a solid foundation for the future and a clear path to prosperity. We pledge to support the departing staff during this transitional period out of the utmost gratitude we have for them.”

What happened to the business?

The $3 billion merger of virtual mental health company Ginger and behavioural health app Headspace resulted in the creation of Headspace Health in 2011. The company launched its comprehensive enterprise mental health programme. It also offered a wellbeing solution for members in November 2022. The service combines Headspace’s meditation and mindfulness apps with Ginger’s on-demand coaching, counselling, and psychiatric services.

Ginger and Headspace had raised a sizable sum of money from investors before the merger. Since its founding in 2011, Ginger has raised more than $220 million in venture capital. While this was happening, Headspace, a direct-to-consumer company founded in 2010, raised $215 million before the merger.

Over the past year, digital mental health businesses have had difficulty. Talkspace, Cerebral, Eleanor, and Foresight, all virtual service providers, declared layoffs. The behavioural health technology company Mindstrong also went out of business earlier this year.

Investors have started to reduce their support for virtual behavioural health enterprises. Funding for behavioural health fell by 56% between 2021 and 2022. This is according to a survey by San Francisco-based digital health venture capital and consulting firm Rock Health.

Besides, the industry has seen a few glimpses of hope. To support its expansion into all 50 states, hybrid care provider Octave raised $52 million in Series C funding in June. Also, the digital mental health platform Spring Health acquired $71 million in April 2023. The layoffs coincide with a wave of layoffs in the IT sector.

Conclusion

For beginners, the Headspace app works wonders. Ann Robinson is a certified clinical social worker and trauma therapist. She says that Headspace may also appeal to more seasoned users. The app “offers a variety of guided meditations,” she added. These are tailored to specific needs, like regulating anxiety or improving sleep. The app makes it easy for anyone to start with meditation.

Reid also admires Headspace’s clear commitment to creating accessible content for all users. It includes the Shine collection’s inclusivity, kid-friendly programming, and meditation classes like Coping with Cancer and Support After a Miscarriage.

No matter how beneficial meditation apps like Headspace may be, Reid argues that they shouldn’t take the place of counselling. Headspace helps with mental health by reducing stress and anxiety, among other things. “This does not take the place of individual work that can be done with a therapist,” the statement reads.

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