Telehealth platform Hims & Hers (HIMS.N) is set to lay off 68 employees, approximately 4% of its workforce, as it adapts to new regulations following a U.S. ban on manufacturing mass copies of the weight-loss drug Wegovy. The ban, enacted by the U.S. Food and Drug Administration (FDA) on May 22, has had immediate repercussions, resulting in a 14% drop in Hims’ stock price. Although the company confirmed the job cuts in a statement on Friday, it clarified the reductions were not directly linked to the compounding ban, stating the layoffs affected various teams across the organization.
These changes are intended to refine operational execution without compromising the company’s strategic priorities, according to a spokesperson. Despite the workforce reductions, Hims plans to continue hiring for roles aligned with its long-term growth objectives. The company has recently announced a collaboration with Novo Nordisk to enhance patient access to brand-name Wegovy. Additionally, Hims is expanding its services into the low testosterone and menopause treatment markets, while also exploring offerings aimed at improving longevity and sleep.
In 2022, the FDA acknowledged a shortage of Wegovy-a drug known to facilitate significant weight loss-allowing compounding pharmacies to fill the gap in demand. Hims began offering its versions of Wegovy in 2024, often at considerably lower prices, which boosted subscriptions and contributed to a 111% year-on-year revenue increase in the first quarter of 2025. The company’s revenue for 2024 included about $200 million generated from Wegovy copies and other GLP-1 weight-loss drugs, out of a total of $1.5 billion.
However, the FDA’s recent assertion that Wegovy is no longer in shortage has ended the provision that permitted the mass sale of compounded copies. In the aftermath, Hims, along with its competitors, has shifted its focus to what they describe as personalized versions of Wegovy. These customized offerings feature smaller doses and more flexible dosage plans compared to those provided by Novo, potentially sidestepping the FDA’s restrictions. Nevertheless, industry analysts express skepticism about whether this personalization strategy will sufficiently protect Hims from potential legal challenges from Novo. “It remains to be seen whether Hims’ method of personalization-titration and dosage-is adequate to meet the compounding clinical exemption requirement,” said Jailendra Singh, a healthcare analyst at Truist.
As Hims navigates these regulatory challenges and workforce adjustments, its commitment to innovation and patient care remains evident. The telehealth sector is poised for continued growth, with companies like Hims aiming to leverage new market opportunities while addressing supply chain and compliance hurdles. The shifting landscape in telehealth and pharmaceutical regulations marks a crucial moment for the industry, one Hims is keen to adapt to in order to maintain its competitive edge.
While the layoffs are concerning, Hims’ proactive measures reflect its determination to achieve long-term success, demonstrating resilience in a rapidly evolving marketplace.
Original Source: https://www.cnbc.com/2025/05/31/hims-workforce-cuts-weight-loss.html
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Publish Date: 2025-06-01 00:57:00
