CoverMyMeds latest Columbus tech firm to lay off hundreds
CoverMyMeds, the Columbus-based health technology firm, announced to its staff this morning that it is laying off 815 workers and leasing out space in its new Franklinton headquarters.
The announcement is the latest in a string of major job cutbacks from central Ohio tech firms including Olive, Lower.com, Root and Upstart.
Kevin Kettler, president of CoverMyMeds, a division of the healthcare company McKesson, announced the layoffs in an early morning email to staff.
“We’re saddened to share that today we will eliminate about 815 CoverMyMeds roles, with the majority of those team members leaving the business between now and April 14,” Kettler wrote.
“Over the past few months, together, we took important steps to bring our expenses more in line with our revenue growth and to optimize our investments. … It’s become clear, however, through business planning that further action is needed for CoverMyMeds to continue on a path of long-term sustainable growth. Today, that means making some difficult announcements related to our people and our workplaces.”
Kettler said laid-off workers will be eligible for severance pay, annual bonuses, career support and healthcare for an unspecified period of time.
Arizona office to be closed
Kettler’s email did not specify where the 815 jobs would be cut, but said the company’s Scottsdale, Arizona, office, which housed CoverMyMeds’ patient support center, would be closed. The center’s functions would be moved to Columbus. Arizona workers who are still employed have the option to move to Columbus.
In addition, Kettler said the company would reduce the size of its Atlanta office and rent out some space in its two-building Franklinton headquarters, which the company opened less than two years ago at a cost of $240 million.
“Columbus will continue to be an important location in our footprint,” Kettler wrote. “We intend to use workspace in both buildings 1 and 2, while also sub-leasing some of the unused space on campus to other organizations beginning this fiscal year.”
Angela Tavrell, director of external communications for CoverMyMeds, reiterated that “Columbus remains an important location for CoverMyMeds, and it’s where we’ll strategically hire and grow the business.”
CoverMyMeds “continues to be a growth segment for McKesson and any changes that we make are reflective of our ongoing investment in our growth objectives.” Tavrell said. “Our commitment is to do everything we can to support our teammates through this transition with care and respect.”
Layoffs in a ‘growing business’
Founded in 2008, CoverMyMeds developed a platform that transmits prior authorization requests between pharmacies, medical providers and health plans. The company was acquired in 2017 by McKesson Corp. for more than $1 billion.
For the most recent quarter, which ended Dec. 31, CoverMyMeds accounted for $1.1 billion of McKesson’s $70.5 billion in revenue, and $136 million of McKesson’s $1.45 billion in profit. It is the most profitable of McKesson’s four divisions, with profit accounting for 12.1{38557cf0372cd7f85c91e7e33cff125558f1277b36a8edbab0100de866181896} of revenue.
“In light of today’s announcements, you may understandably be asking why these decisions are necessary in a growing business,” Kettler told employees. “In summary, we are aligning staffing with timing of customer contracts, managing our portfolio and key investments in a more disciplined manner, and integrating further to operate sustainably as one CoverMyMeds. We, as a leadership team, intend to share more about these factors in the coming days.”
@JimWeiker
