In March 2023, healthcare startup Pristyn Care, backed by Sequoia Capital and Tiger Global, laid off nearly 300 employees, or about 15% of its workforce. The layoffs mainly affected junior and mid-level positions in sales, administration, category, and city teams. In this article, we'll discuss what happened, why it occurred, and the potential future impact on the company.
One of the main reasons behind Pristyn Care's layoffs was under-performance by the company. While the company denies the layoffs and claims that only a few employees were asked to leave due to poor performance, industry analysts suggest that the layoffs highlight a larger turmoil within the company, including rising employee attrition and unrealistic targets. The company's CEO, Harsimarbir Singh, has been criticized for his LinkedIn post encouraging offbeat interview hacks.
Another factor contributing to the layoffs was Pristyn Care's decision to scale down its international expansion segment focused on medical tourism. The company initially aimed to popularize the influx of international patients to India for healthcare but failed to generate sufficient revenue in that vertical. In terms of broader industry trends, medical tourism as a category is still nascent in India and the infrastructure needs to develop further to support the business.
The financial implications of the layoffs on Pristyn Care include a reduction in employee benefit expenses, which is the company's biggest cost center. This is expected to alleviate the cash burn and help the company minimize its cash burn rate. In the short term, the layoffs may help improve the company's financial health by reducing expenses. However, in the long term, the company needs to focus on increasing revenue to achieve a target of Rs 1,000 crore by FY24.
Post-layoffs, Pristyn Care is scaling down its international expansion segment focused on medical tourism. Instead, the company is studying Middle Eastern, African, Central Asian, and South Asian markets for medical value tourism and international expansion. This strategic shift aims to position the company for future success by focusing on more promising markets.
The future impact of Pristyn Care on the healthcare industry remains uncertain, as the company faces financial challenges and culture issues. While the layoffs may help alleviate cash burn, the long-term effects on the industry are unclear. Other healthcare companies have also implemented layoffs, indicating a potential trend in cost-cutting measures. However, the specific effects of Pristyn Care's layoff on the industry have not been discussed.
Pristyn Care's layoffs were driven by under-performance, high attrition, and a decision to scale down their medical tourism segment. The layoffs may temporarily improve financial health, but the company's future and industry standing remain uncertain. These developments could signal cost-cutting trends in the broader healthcare market. Pristyn Care's future actions might involve exploring more promising markets and focusing on revenue growth to mitigate the long-term effects of the layoffs.
