Olive AI lays off 450

Olive AI this morning announced it would lay off 450 employees amid a shift in business strategy, according to a staff-wide email sent by CEO Sean Lane.

Why it matters: The layoffs at the $4 billion health care automation company come following a series of large staff departures and hiring freezes, as well as an April Axios investigation.

What they're saying: In the letter, Lane writes that the company "must reconcile missteps we made," including a "lack of focus."

• "Our fast-paced growth and lack of focus strained our product and engineering resources and prevented us from executing quickly on key initiatives," Lane writes. "I take responsibility for this."
• In a statement provided to Axios, a company spokesperson said the layoffs are "based on the realities of today’s economy combined with the same headwinds other organizations face."

Context: Olive froze hiring effective May 23 and repeatedly told employees that layoffs were not in the company's future, three sources tell Erin.

• Since then, roughly 40 employees, many of them in senior leadership roles, have left the company, according to three sources and LinkedIn, including its:
• VPs of: finance, sales enablement, and engineering
• Senior marketing and events manager
• Senior director of employee development and engagement
• Head of health care research
• Director of cloud infrastructure
• Human operations coordinator
• Revenue operations lead

By the numbers: The layoffs represent about 31% of the company.

Details: Going forward, Olive will shift its strategy by homing in on just two products, rather than a sea of offerings, to allow the company to "achieve profitability sooner than we originally planned," the letter reads.

• Those products include provider-facing automated revenue cycle tools and payer-facing utilization management tools.
• Olive employees impacted by the layoffs were told their official employment would end in 60 days but that their last day of work is Tuesday.
• "Eligible employees" will also receive at least 10 weeks of pay including 60 days of salary continuation through September 19, 2022.
• Employees are also "eligible" for two weeks of severance pay per year of service, plus benefits through the end of September that includes access to First Stop Health and Cerebral, per the letter.

This story has been updated with links to the CEO's email and additional reporting on recent departures.