Cerebral Inc. leaders reportedly told employees that the company grew too fast and is now reversing growth to enter a sustainable trajectory.
On Monday, Cerebral’s top executives, including President Jessica Muse and CEO David Mou, held public meetings with employees as part of the communication effort for its 20% workforce reduction. Business Insider reported at those meetings on Wednesday.
Last week, behavioral health businesses got an email sent to employees by Mou announcing the layoffs.
During the meetings, executives allegedly told employees that Cerebral took advantage of temporary prescription drug regulations to maximize patient acquisition and retention. But now, demand has ebbed following Cerebral’s decision to stop prescribing controlled substances after months of scrutiny, including a civil suit by a former executive, federal investigationsa congressional probeY insurers and pharmacies reevaluating his work with Cerebral.
Cerebral announced that it would stop prescribing most of the controlled substances in May, from October 15.
Muse, according to Business Insider, said during a town hall meeting that the company spent more on advertising than it has been able to make as a result.
Muse and Mou pointed to COVID-era federal flexibilities for prescribing certain drugs via telehealth as the motivation to shut down controlled substances. However, those federal flexibilities are still in place today.
While some Cerebral employees criticized the company’s business approach, Muse, according to Business Insider, dismissed greed as a motive. He cited former founding CEO Kyle Robertson’s practice of helping patients even if it wasn’t profitable.
The company has now shifted its focus to “very sustainable smart growth,” Muse said, according to Business Insider.
Additionally, Cerebral leaders cited mounting economic pressures as the reason the startup is enacting spending cuts. These include downsizing, reducing the number of company recalls, and discontinuing certain programs such as care coaching, training, and weight management. A source confirmed those details to BHB.
Cerebral confirmed last month that it would stop offering care counseling and guidance services. At that time, she did not answer any further questions about layoffs.
Management held three meetings on Monday: for corporate staff, support staff, and clinical staff.
Business Insider also reported that Cerebral has canceled its clinical trials and plans to expand to the UK.
Robertson founded Cerebral in 2019. Mou replaced Robertson In May. Muse joined the company in April 2020 as COO and became president when Mou became CEO.
