Outcome Health is offering voluntary buyouts to employees amid “ongoing scrutiny” regarding allegations that the high-profile Chicago startup misled advertisers and investors.
The buyouts were offered to employees Friday, company spokesman John Eddy said in an email Sunday.
Outcome Health places screens in doctor’s offices that run educational content about health topics and advertisements from drug companies. Earlier this month, big-name investors sued Outcome Health, CEO Rishi Shah and President Shradha Agarwal, alleging fraud as the company secured $487.5 million in funding and rose to a valuation of about $5.5 billion.
Since the lawsuit was filed, hospitals have backed away from the fast-growing company, and investors have filed court documents indicating they received subpoenas from the Justice Department. Investors also anticipate inquiries from the Securities and Exchange Commission, according to court documents.
In a statement Sunday, Outcome Health said it is “proud of the team that has helped continue to grow the company’s network, with several hundred medical offices and thousands of new devices added in just the last few weeks.
“Outcome Health understands that these are challenging times and that the ongoing scrutiny in the media may not be the right fit for everyone so the company is offering voluntary buyouts,” according to the statement. “Outcome Health’s founders believe strongly in the long-term success of the business and that’s why they are seeking to reinvest their own money into the company.”
Eddy would not specify how many employees who were offered buyouts.
In late September, Outcome Health laid off employees at its Chicago headquarters, just days after announcing a hiring push to add 2,000 jobs over the next five years.
The Wall Street Journal, which first reported the buyouts, also reported that Harvard Health Publishing and the American Medical Association suspended their relationships with the company. Representatives from both organizations did not respond to requests for comment Sunday.
“More than 90 percent of company’s content partners remain active,” Eddy said in an email. “Outcome Health continues to sign up prominent new healthcare systems and advertising clients.
The company also named Carlin Adrianopoli from Chicago-based FTI consulting as its interim CFO.
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