Exclusive: HealthPlix Axes 25% Workforce Due To Performance Issues, Role Redundancies

Bengaluru-based healthtech SaaS startup HealthPlix fired 100 employees, or 25% of its workforce, as part of a restructuring exercise and annual performance review. 

A spokesperson of the startup confirmed the development with Inc42 and said that around 60 employees were let go because of poor performance, while the remaining were impacted due to role redundancies.

“Around 55 to 60 employees were let go because their performance was below par and we had to let them go as part of the annual appraisal cycle,” the spokesperson said. 

Sources told Inc42 that a majority of the employees who were fired due to performance issues were from the sales department. 

While the impacted employees were not put on a performance improvement plan (PIP), they were given feedback multiple times to work on their shortcomings, the spokesperson added.

Meanwhile, sales, product, engineer, and revenue teams were impacted by the restructuring exercise, which resulted in 10% reduction in HealthPlix’s workforce.

“The restructuring exercise was in line with the company’s next growth arc. HealthPlix intends to go global and is planning to make enterprise solutions for its foreign clients,” the spokesperson added. 

Inc42 has also learnt that HealthPlix has now started charging customers for its electronic medical record (EMR) software, which it used to offer free of cost earlier.

The sources cited above also said that the number of employees impacted by the restructuring exercise could be much higher than that cited by the startup.

All the 100 employees will receive severance pay based on their employee contracts. Most of them will receive two months of severance pay. 

Founded in 2014 by Sandeep Gudibanda, Raghuraj Sunder Raju, and Prasad Basavaraj, HealthPlix allows doctors to create a full medical profile of their patients with the help of its ERM software, helping them during follow-on consultations. 

The startup last raised $22 Mn in a mix of equity and debt in its Series C funding round last year amid the funding winter. The round was led by Avataar Venture Partners and SIG Venture Capital. 

Back then, the startup said it would use the capital to grow its base of doctors and invest more in sales, product and engineering teams. 

HealthPlix currently works with around 14,000 doctors. 

The startup has raised $40 Mn in funding till date and counts Lightspeed Venture Partners, JSW Ventures, Kalaari Capital, and Chiratae Ventures among its backers. 

It posted a net loss of INR 41.9 Cr in the financial year 2022-23 (FY23), 17% higher than INR 35.8 Cr in the previous fiscal year. However, its revenue more than doubled to INR 29.1 Cr from INR 13.6 Cr in FY22. 

At INR 53.9 Cr, employee benefit expenditure was the startup’s biggest expense and accounted for 75% of its total expense of INR 71.5 Cr in FY23. Employee costs rose 65% during the year under review from INR 32.6 Cr in FY22. 

HealthPlix competes against startups like Practo. It is pertinent to note that the startups in the EMR domain have been struggling for some time. While Kalaari Capital-backed Phablecare shut its operations last year, PharmEasy-acquired Docon undertook a massive restructuring exercise in 2022. 

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