Heidi Health Cuts 18% of Workforce After $340M Raise

Heidi Health will cut 18 per cent of its workforce, a day after two co-founders left or stepped back from operational roles, as the heavily backed medical software company restructures around markets it says will deliver the greatest impact. Chief executive Thomas Kelly told staff in Melbourne on Thursday that volatile sales and rising competition in the United States were behind the decision.

The company’s market calculations will decide which jobs remain. Heidi didn’t identify the markets affected, but said some roles were “no longer required.” The Australian described the cuts as 100 jobs; the Sydney Morning Herald reported 108 roles. Heidi said severance packages would vary by country but exceed statutory requirements, while the company continues hiring for key roles.

The company’s choices, workers’ consequences

Heidi said it was “rebalancing our team around the markets and investments that will deliver the greatest impact for our customers and support growth.” The statement lays out the hierarchy plainly: investment priorities and growth guide the restructuring, while workers face the loss of their roles. Kelly told staff, “it's painful, but it's what we need to do.”

The Melbourne company makes software that records doctor-patient consultations and writes clinical notes. Heidi says it supports close to 3 million patient interactions a week, operates in more than 190 countries, and holds a market-leading position in Britain and the Asia-Pacific region. In Australia, its software is used at the Royal Children's Hospital Melbourne, Children's Health Queensland and Metro South Health in Brisbane.

Heidi’s annual recurring revenue reached US$50 million in April, up from US$1 million two years earlier. In September, it raised US$340 million, or A$475 million, in a deal led by venture capital firm Blackbird that valued the company at $1.26 billion. The funding included a US$240 million facility from US firm General Catalyst, to be repaid from revenue the money generates.

Blackbird has repeatedly called Heidi the fastest-growing company in its portfolio, ahead of graphic design software provider Canva. On Thursday, Blackbird backed the cuts, saying the affected people had helped build Heidi and that it would use its network to help them find another role, including within its portfolio. That offer comes from an investor in the company making the cuts, not from a worker-led response described in the announcements.

Founders step away as investors watch

Waleed Mussa, who ran finance, compliance and corporate affairs, said on LinkedIn on Wednesday that he was stepping back from his operational role to spend time with his family. He planned to stay for the next couple of weeks to finish work from the recent fundraising. Mussa wrote: “Tom, the board and I have recognised our teenage child has now matured and as Heidi enters this next phase of growth and scale, the timing is right for this transition.”

Yu Liu, who built Heidi's technology, was moving into an advisory role focused on models and hardware until the end of March. Kelly said the founders were leaving for different reasons. “Waleed and Yu built Heidi with me, and it's going to be really hard for all of us to continue without them,” he wrote.

A fight over who controls the software

The job cuts landed amid a dispute with Best Practice, the Sonic Healthcare-backed company whose Bp Premier software many Australian GPs use. Best Practice warned customers that using Heidi's new AI agent platform, Heidi II, with Bp Premier would breach its licence conditions, citing patient safety and data integrity. Kelly said Best Practice's position raised “concerns of anticompetitive conduct”; Best Practice chief executive Craig Hodges rejected that. Best Practice is an investor in Heidi rival Lyrebird Health.

Kelly said in September Heidi needed to keep improving its own models, “otherwise we wouldn't be able to keep giving the product away for free, as we've seen Canva and others struggle to do.” The same week, Canva announced cuts of 1,271 jobs, or 22 per cent of its workforce, after its growth slowed for the first time in a decade amid the rapid rise of AI. Atlassian cut 1,600 jobs in March, and WiseTech Global announced 2,000 cuts the same month. The announcements show the costs of corporate restructuring landing on workers even as companies, investors and executives set the terms.