Noom, a provider of AI-powered digital weight loss coaching programs, has reportedly confirmed its latest third round of layoffs.
Noom previously laid off 10% of its staff, or around 500 people in October 2022, most from its coaching team, according to TechCrunch.
Insider first reported Noom’s first round of layoffs in April 2022 when Noom cut about a quarter of its coaches as part of a strategy shift in its coaching model.
Noom was valued at $3.7 billion in 2021. Now, however, it’s showing tensions from a personnel front. Noom’s scaleback of its coaching services suggests a departure from the platform’s original pitch, which was to combine intelligent nutrition with exercise coaching. In 2020, Noom hit $400 million in revenue using this strategy. One year later, Noom expanded its coaching services by launching a mental health vertical.
The startup, which has raised over $650 million in funding since launching in 2008, is partially known for its controversial approach to weight loss and dieting.
Commenting on the latest layoffs, a company spokesperson of Noom said MobiHealthNews: “In an effort to build a more efficient business centered around the needs of our customers, we made the difficult decision to reduce a portion of our workforce.”
“We made these changes to focus our workforce on the most critical areas of the business. With these changes, the company will be better positioned to deliver world-class products, technology, and coaching to more people looking to lead healthier lives,” the spokesperson said.
According to the spokesperson, the recent move was related to “a revenue mix shift within the Noom business towards our fast-growing GLP-1-related products, including Noom GLP-1Rx and Noom GLP-1 Companion.”
GLP-1s, or glucagon-like peptide-1 receptor agonists, are a class of medications used in the treatment of type 2 diabetes and more recently, in the management of chronic weight conditions.
“The GLP-1Rx program, which launched in September, is performing extremely well and we are investing heavily in that portion of the business. As part of our annual planning process, we made the difficult decision to shift resources into our fastest growing segments.”