- Athenahealth told its employees Tuesday of layoffs that will claim nearly 4% of its workforce across all offices, according to a source familiar with the situation. A spokesperson with the EHR company did confirm the layoffs but declined to disclose specifics.
- The staff cuts come just two months after the company was acquired by Veritas Capital and Evergreen Coast Capital as part of a $5.7 billion deal.
- In a statement provided to Healthcare Dive, the spokesperson said the company is reorganizing its resources following its integration with Virence Health, a part of the acquisition deal.
With integration of Virence and athenahealth underway, the large transaction resulted in overlaps in functional areas, the spokesperson for athenahealth told Healthcare Dive. The cloud-based health IT vendor and Virence are working to become one company with a sharpened strategic focus, the spokesperson said.
"While we've had to make some difficult decisions, we have implemented a new organizational model that enables faster decision making, decreases bureaucracy and consolidates capabilities so we can best deliver value to the 160,000 providers on our network," the company said in a statement.
In its last 10K in 2017, the company reported about 5,000 full-time employees.
This isn't the first time athenahealth has trimmed its workforce amid a larger strategic shift. The company began a reorganization and cut 9% of its workforce two years ago after activist investor Elliott Management disclosed its 9.2% stake in the Watertown, Massachusetts-based company.
Last year, athenahealth's largest shareholder, Janus Henderson Group, began pressing the company to put itself up for sale. In May, athenahealth received an unsolicitied bid from Elliott Management. Amid the pressure to accept an acquisition, athenahealth CEO Jonathan Bush stepped down after reports (that he later acknowledged) he had assaulted his ex-wife.
A deal was eventually reached in November with Veritas Capital and Evergreen Coast Capital, a subsidiary of activist investor Elliott Management. The purchase was one of the largest private equity-backed buyout deals in healthcare in the past 10 years, according to industry research firm Preqin.