Gut health test startup ZOE announces cuts

Gut health test startup ZOE has announced it is cutting its costs by 20%, which means employee numbers will also be cut.

In a LinkedIn post on the 11th April, CEO and Co-Founder Jonathan Wolf stated: “We’ve seen extraordinary growth since launching ZOE membership in the UK two years ago. We spent the last year desperately trying to catch up with demand, as we welcomed 100,000 new members. Unfortunately, it’s now clear that in doing this, we over-expanded our team over the last six months. We now have to make difficult decisions to reduce our costs by around 20%, which will impact some of our team. I take full responsibility for this.”

Within the full statement, Wolf goes on to say: “While we continue to see many thousands of new members joining ZOE each month, our forecasts for 2024 growth were wrong. We have overexpanded our team in a way that’s unsustainable until we have a larger member base. To correct this, we will need to make substantial; cost reductions of around 20%, and as a result, we are considering reducing the number of roles at ZOE.

“If we do not reduce our costs, our monthly burn-rate will be much too high. I am confident that would be unsustainable and put our mission at risk. Instead, we need to operate the company more in line with our revenue.”

The statement further outlined the support measures for the departing team members, which include compensation, extended healthcare coverage, the option to retain a work laptop, and career support to help current employees find new roles.

The statement informs employees who will be impacted by this news, that they will each ne invited to have an individual meeting with a leader of their team. Within this meeting, leaders will use this time to discuss the employee's role and what this news means to them. In the UK, employees will be provided with a proposal to leave ZOE. Outside of the UK, this process will be different depending on where employees work.

“We’re also stopping our London office search, will not enhance our US warehouse, and will significantly reduce contract costs. Unfortunately, the vast majority of our costs come from our employee salaries,” Wolf added.

ZOE offers gut microbiome testing kits for £300, along with a monthly subscription to a diet advice and tracking app and personalised scores for thousands of foods, added 100,000 new members throughout 2023.

ZOE was a spinout of King's College London in 2017, and was recognised as the UK's fastest growing healthtech by headcount in 2023. According to Dealroom, it has secured a total of $84.5 million in funding from investors such as Balderton Capital, Daphni, Air Street Capital, and Steven Bartlett’s Flight Fund. During the COVID pandemic, ZOE became widely known as it adapted its platform to enable the public to log COVID symptoms. In 2021, at the peak of its usage, ZOE’s Covid app had 4.7 million users, as reported by the company.

Since then, the company shifted its focus back to gut microbiome testing and has established itself as a prominent brand in the UK. This transition has been prominently supported in the public eye by its celebrity scientist co-founder, Tim Spector, along with a lineup of celebrity endorsers, including TV presenter Davina McCall and podcaster Steven Bartlett.

Concluding his post, Wolf commented: “We are a startup, and the startup journey often consists of two steps forward and one step back. This is particularly true when trying to do something really hard and ambitious.

“I remain of the view that we should not be ‘in a wartime mode’ – difficult times are when our values are tested, not abandoned. We want to continue to build ZOE with care and positivity, because we want to be proud of how we devote our working hours.

“In this moment, I ask that we all come together as a ZOE community to show up for one another. I will certainly do my best to be here for all of you.”