Athenahealth lays off hundreds, reorganizes to be leaner
Cloud-based EHR vendor athenahealth confirmed plans to layoff 9 percent of its workforce on Thursday and that it is simplifying its structure to be leaner and more responsive.
The company also noted in a filing with the Securities and Exchange Commission that its top line revenue is up 11 percent while earning dropped 7 percent year over year.
“Our board of directors and management team have been conducting a strategic review of our operational and financial strategy, leadership and governance to drive increased levels of profitable growth and enhance shareholder value,” an athenahealth spokesperson said. “As part of this effort, we announced [to our employees] earlier today a new organizational design.”
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The leaner, more simplified structure is designed to enable the EHR vendor to be more responsive to client needs and is expected to improve employee engagement by increasing efficiencies, streamlining workflow and enhancing accountability, the spokesperson said.
“It will result in a reduction to athenahealth’s total workforce by approximately 9 percent,” the spokesperson added. “We expect that the majority of these workforce reductions will be completed by the end of 2017.”
When markets closed on Thursday, athenahealth said it was announcing “the company’s sustained momentum and strong ability to drive financial and operational results for clients across the community hospital market.”
It went on to describe clinical successes, stating that as part of its national network of 106,000 providers and 102 million patients, athenahealth supports a growing list of 56 community, rural and critical access hospitals. Those clients that have been on athenaNet for a full year are achieving on average cash collections of 5 percent over baseline, the company said.
“One in three rural hospitals is at financial risk, which says to me they need a partner to help them scale innovation as well as eliminate underperforming processes and traditional software tools,” said Kyle Armbrester, chief product officer at athenahealth. “We’ve been able to successfully tap into a market underserved by current healthcare IT vendors and retain 95 percent of hospital clients who we’ve brought live onto our network.”
It’s not clear if all of the layoffs came from the Watertown headquarters or if some of them occurred at other U.S. or international offices. According to securities filings, athenahealth had 5,305 employees as of July.