Nomad Health, a healthcare staffing startup, laid off around 20% of its corporate workforce this week, according to four terminated employees, as the surge in travel nurses and other temporary healthcare workers ignited by the pandemic cools down.
Nomad Health cofounder and CEO Alexi Nazem did not immediately respond to a request for comment. The employees were granted anonymity for fear of retribution.
“Nomad, like so many other companies in the world, is confronting a major shift in the post-pandemic economy, with inflation, slowing demand, and the prospect of a recession. The healthcare staffing market is itself resetting from pandemic-fueled highs in both volume and price, and it is now decelerating at a faster rate than anticipated,” Nazem wrote to employees in an email reviewed by Forbes. “Nomad’s leaders, starting with me, were too optimistic about the trajectory of our market. This means, unfortunately, that we built our team for an economic reality that no longer exists.”
The plan was for employees to be informed on Wednesday, but a “technical error” caused certain people to receive an email notification on Monday evening, according to the email from Nazem. This meant many of the affected employees woke up Tuesday morning to an overnight email with the news.
New York-based Nomad Health, founded in 2015, has raised more than $200 million in equity and debt financing to date, including a $105 million round led by Adams Street Partners and Icon Ventures in July 2022. Kevin Ryan, founder and CEO of venture fund and incubator AlleyCorp, is also a Nomad Health cofounder. The funding was supposed to push Nomad beyond travel nurses to help health systems with staffing a much broader group of temporary healthcare workers, including lab techs, ultrasound techs and physical therapists.
Employees will receive 6 weeks of base pay and one month of paid COBRA health insurance coverage, according to the email.
“We have tried hard to avoid this outcome. We have cut non-personnel related spending,” Nazem wrote. “Everyone on the Nomad management team has taken a pay cut, too. But ultimately, the changes in the environment around us were too great to address without reducing the size of our staff.”
This is a developing story and will be updated.