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Cue Health
April 28, 2023
June 14, 2024

Cue Health Layoffs: What Happened & Why?

In April 2023, Cue Health Inc., a health technology company, announced a significant cost reduction plan (CRP) that led to the layoff of 326 employees, approximately 30% of their global workforce. This decision aimed to improve operational efficiency and reduce the company's cost structure. In this article, we'll discuss the reasons behind these layoffs, their impact on the company, and what the future may hold for Cue Health Inc.

Why did Cue Health have layoffs?

The layoffs at Cue Health were a result of the company's implementation of a new cost reduction plan (CRP) aimed at improving operational efficiency and reducing its cost structure. The CRP suggests that the company may be facing financial challenges that necessitated internal restructuring. Cue Health's Co-Founder, Chairman, & Chief Executive Officer, Ayub Khattak, addressed the employee restructuring in a letter to the company's workforce.

As part of the CRP, Cue Health offered severance packages to the affected employees, which included cash severance payments, payments for healthcare coverage, and potential acceleration of vesting of restricted stock units. The eligibility for these severance benefits was contingent upon the employees' execution of a separation agreement, which included a general release of claims against the company. The payments relating to the CRP were expected to be completed by the end of the fourth quarter of 2023.

Financial Impact and Future Directions

The financial implications of the layoffs are reflected in an estimated restructuring charge of $5.0 million to $7.0 million for one-time termination benefits, primarily in cash expenditures, along with non-cash charges of approximately $0.3 million related to the severance package.

Looking ahead, Cue Health may consider strategic adjustments, focusing on optimizing its product lines and market strategies to better position itself for sustainable growth and success.

Impact on Industry

The reduction of Cue Health's workforce by 30% could influence the healthcare industry by potentially altering the dynamics of competition, innovation, and service delivery. The extent of these effects will unfold as the company progresses with its strategic realignments.


Cue Health's implementation of a cost reduction plan, resulting in significant layoffs, is a strategic move to enhance operational efficiency and manage costs effectively. The company has taken steps to support affected employees through comprehensive severance packages. As Cue Health adapulates to these changes, it could influence its future trajectory and impact on the healthcare industry, reflecting a potential shift in its strategic direction and market presence.