Revolution Health to Lay Off 50 Employees
Saturday, June 7, 2008
Revolution Health Group, the health-care business launched two years ago by former AOL chairman Steve Case, plans to lay off more than 50 employees next week, according to sources inside the company.
The layoffs are primarily the result of a reorganization following Revolution Health's acquisition of two companies late last year, the sources said. The cuts will reduce the number of employees at the District startup from around 250 to below 200.
It is Revolution Health's second downsizing in eight months. The company laid off 60 employees in October from its Revolution Health Networks division, one of four divisions at the privately held firm.
Revolution Health spokesman Brad Burns declined comment.
Revolution Health was founded in 2005 to try to make health care more consumer friendly. Case has invested tens of millions of his own money, brought in other local investors and hired hundreds of employees in anticipation of rapid growth.
The company has said its Web site traffic is strong, with millions of unique visitors each month. But sources familiar with the business said it has not turned a profit. Those sources, who declined to be identified because they are not authorized to speak publicly, said the company has a business plan to become profitable in its third year, which would be next year.
Following the October job cuts, Revolution Health invested in two new Web sites, one of which hired 50 new employees. It acquired HealthTalk, a site devoted to patients with chronic conditions. It also invested in SparkPeople, which offers diet ideas, exercise plans and advice.
Case was inspired to launch the business after his brother's battle with brain cancer. Case has received backing from several prominent figures, including former secretary of state Colin L. Powell and former Fortune 500 chief executives Franklin D. Raines and Carly Fiorina.