Cue Health (NASDAQ: HLTH) stock soared during pre-market trading Friday, despite plans to lay off remaining employees and shut down operations.
Cue Health (HLTH) is set to terminate all its remaining U.S. employees, including company leadership, this week, as confirmed by a filing with California’s Employment Development Department. The San Diego Union-Tribune first reported the layoffs.
The decision comes as Cue had already endured multiple layoff rounds over the past two years, with plans to cut nearly half of its staff announced earlier this month.
Cue Health Financial Struggles and Layoffs
Cue Health initially built its business around a portable molecular testing platform, experiencing rapid growth during the COVID-19 pandemic. The company secured significant agreements with Google and the NBA for COVID-19 testing and raised $200 million through an initial public offering in 2021. Additionally, Cue raised hundreds of millions of dollars through contracts with the Departments of Defense and Health and Human Services for COVID-19 test provision.
However, the company’s fortunes began to wane as federal funding diminished and demand for COVID-19 tests declined. Despite receiving de novo clearance for its COVID test in 2023, it remained Cue Health’s only FDA-cleared product.
By the end of 2023, Cue Health’s revenue plummeted to $70.9 million, a significant drop from $483.5 million the previous year. This financial downturn led to several layoffs, including a 230-person reduction announced earlier this month and more than 200 layoffs in January.
The company’s sole product came under fire this month when the FDA issued a warning letter concerning unauthorized changes to the COVID test and advised against its use.
Initially, Cue Health had planned to lay off 190 U.S. employees effective July 1, with one additional employee on July 10, as per a California Worker Adjustment and Retraining Notification filing. However, the company updated the state on Monday, stating that all remaining U.S. employees, including company leadership, would see their employment terminated on May 24. The company’s board made this decision “due to the fluid nature of this situation.”
Earlier this year, CEO Ayub Khattak and CFO Aasim Javed resigned.
Cue Health (NASDAQ: HLTH) Stock Price Action
As of 05:53 a.m. (Eastern Time) Friday, HLTH stock traded at $0.1567, marking a 66.17% increase compared to the previous trading session.
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