Revolution Health To Lay Off 50

By Thomas Heath

Revolution Health Group, the health-care business launched two years ago by former AOL chairman Steve Case, plans to lay off more than 50 employees next week, according to sources inside the company.

The layoffs are primarily the result of a reorganization following Revolution's acquisition of two companies late last year, source said. The cuts will take the District-based startup from around 250 employees currently to below 200.

It is Revolution Health's second downsizing in eight months. The company laid off 60 employees last October at its Revolution Health Networks division, one of four divisions at the privately held firm.

Revolution Health spokesman Brad Burns declined comment.

Revolution Health was founded in 2005 with a mission to make health care more consumer friendly. Case has invested tens of millions of his own fortune, brought in other local investors and hired hundreds of employees in anticipation of rapid growth.

The company has said its Web site traffic is strong, with millions of unique visitors each month.

But sources familiar with the business said it has yet to turn a profit. Those sources, who declined to be identified because they are not authorized to speak publicly, said the company has a business plan to turn a profit in its third year, which would be next year.

Following last October's job cuts, Revolution Health Network invested in two new Web sites, one of which brought 50 new employees. It acquired HealthTalk, a site devoted to patients with chronic conditions. It also invested in SparkPeople, which offers diet ideas, exercise plans and advice.

Case was inspired to launch the business after his brother's battle with brain cancer. Case has received backing from several prominent figures, including former Fortune 500 chief executives Franklin D. Raines and Carly Fiorina and former secretary of state Colin L. Powell.

By Dan Beyers  |  June 6, 2008; 5:38 PM ET  | Category:  Technology
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