• Digital health startups are laying off employees in droves to cut spending in a tough market.
• Many of the startups that already cut workers last year and are now coming back for round two.
• These are the 13 healthcare startups to slash staff so far in 2023.

Digital health layoffs have been on the rise since last year. As interest rates skyrocketed, investors started to pull back on funding, leading companies to slash staff to preserve cash.

But this year's layoffs threaten to outpace 2022. Thirteen digital health startups have already cut staff less than two months into 2023. In 2022, Insider tracked 26 startups that laid off employees.

Like last year, many of the startups that are cutting employee were last valued at $1 billion or more. Their layoffs are another signal of how previously high-flying companies that notched inflated valuations are now hunkering down to survive the funding slump.

Many companies that did layoffs last year will be forced to make more cuts this year to stay afloat and avoid raising a down round, said Andreessen Horowitz general partner Julie Yoo in January.

"Unfortunately, the average company tends to not cut enough the first time," she told Insider. "Companies will go through multiple rounds of layoffs as the market signals don't turn significantly better, and they'll have to continue to extend their runway if they're trying to avoid raising a round that they believe will be punitive in some form."

Here are the digital health startups that have cut staff so far in 2023, as of February 28:

Have a tip about digital health layoffs that you want to share? Contact Rebecca Torrence at [email protected] or through secure messaging app Signal at +1 423-987-0320.

This story was initially published on February 15. It was most recently updated on February 28 to add layoffs at Cerebral.

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