Dive Brief:
- Cue Health announced two rounds of layoffs in January as it grapples with lower sales of COVID-19 tests.
- One round of layoffs, announced Jan. 4, affected 94 employees, while another round announced Jan. 25 affected 151 employees — nearly a quarter of Cue’s workforce.
- The San Diego-based diagnostics company makes point of care tests with a custom cartridge reader. Most of Cue’s revenue comes from its COVID-19 tests, but a slowing demand has caused operational losses and raised concerns about the company’s ability to continue.
Dive Insight:
Cue, which was founded in 2010, grew quickly through agreements to provide COVID tests to the Department of Defense and Google. It now faces financial pressures as demand for those tests has waned.
The company cut jobs in 2022 and hundreds of positions last year as its large government contracts wound down. The latest round of cuts includes several machine operators at its production facility in Vista, as well as managers, researchers and Cue’s vice president of investor relations, according to a Worker Adjustment and Retraining Notification (WARN) filing from the state of California.
“In order to best align our resources with our strategic priorities as part of our go-forward plan, the difficult decision has been made to further reduce our global workforce,” a company spokesperson wrote in an email. “We are grateful for the many contributions of our departing colleagues and are supporting them during this transition.”
In the third quarter, Cue reported about $14.8 million in revenue, a 78% decrease year over year. Most of the money came from private sector customers.
Cue had about $111.5 million in cash and equivalents as of Sept. 30 and a $443.1 million deficit.
The company is still working to expand the menu of tests it can offer on its system.
Currently, Cue has two FDA-authorized tests on the market for COVID and Mpox. It made a de novo submission to the FDA for a flu test in 2022 and an RSV test last May. The company is also working on a combination flu-COVID-RSV test and plans to make a de novo submission in 2024, a company spokesperson wrote in an email.