Tela Bio, a Malvern-based medical-technology company, plans to cut about 20% of its workforce.
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The layoffs, most of which are to take place this month, will reduce the company’s headcount from 201 full-time employees to 160, according to an SEC filing last week. The locations and types of jobs affected were not specified. Company executives say the move is part of a larger plan to slash Tela Bio’s annual operating expenses by about $17 million.
CEO Heather Getz said in a statement that they are “implementing a broader initiative to strengthen our cost structure and position Tela Bio for long-term success.”
Headquartered in the Great Valley Corporate Center, Tela Bio makes biological products for soft-tissue repairs, including hernia surgeries and ab-wall reconstructions. Among its products: OviTex tissue, made from sheep stomach, which Tela Bio says promotes natural healing while reducing plastic in the body.
Last year, Tela Bio reported more than $80 million in revenue, a up 16%, which the company attributed to an increase in customers and higher sales overseas, according to earnings reports. But with $88 million in operating expenses, the company continued to operate at a loss, as it has since its founding in 2012.
Tela Bio, which went public in 2019, had accumulated a deficit of more than $421 million as of June, according to its latest quarterly report.
Company executives expect these layoffs to cost about $1.5 million in severance and other employee payouts, according to the SEC filing.
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On Monday, the company also parted ways with Roberto Cuca, who had served as chief financial officer and chief operating officer since 2021. Per the SEC filing, Getz, the CEO, will become the company’s “principal financial officer.”
Tela Bio executives said they’ll provide more information on cost-cutting efforts on the company’s next earnings call, scheduled for November.
“We are focused on disciplined execution, strengthening the business, and creating a more efficient organization positioned to deliver sustainable long-term growth,’ Getz said, adding that executives ”expect this initiative to extend our cash runway into 2028.”
Getz was appointed CEO last month, succeeding Tela Bio cofounder Antony Koblish. Previously, Getz was executive vice president and chief financial and operations officer at Butterfly Network, a portable-ultrasound company.
In announcing Getz’s hiring, Tela Bio executives said she made “transformative changes in [Butterfly Network’s] strategy, capital allocation, cash runway and investor relations while building a performance culture.”
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Butterfly Network remains unprofitable, but has seen recent revenue increases.