The fast-growing eating disorder treatment company Monte Nido & Affiliates has hit a bump in the road and is laying off staff.
A source familiar with the matter told Behavioral Health Business that close to 130 staff members will be laid off due to underperformance in specific markets. The company declined to answer specific questions but acknowledged that the layoffs were happening.
“Given the consistent demand across different regions, we are thoughtfully adjusting our staffing to better meet the needs of our clients and the communities where we identify a critical need,” a spokesperson from Monte Nido told BHB.
It’s not clear what types of roles were impacted or how big the company’s workforce will be after the job cuts.
Monte Nido operates virtual and facility-based services in 29 states. It runs facilities and offers virtual services in 14 states and virtual-only services in 15 states, based on an analysis of its public offerings.
Since the beginning of 2023, the company has expanded its footprint by 23%, announcing the addition of 11 facilities. All of the new facilities are in the same area as existing facilities, ostensibly deepening the company’s presence in that market and increasing its capacity to meet local demand.
The private equity firm Revelstoke Capital Partners acquired Monte Nido through a competitive bid process. Following the deal, announced in July 2022, then-CEO Candy Henderson told BHB that the funding was meant to grow the company via organic and M&A initiatives. Levine Leichtman Capital Partners LLC sold Monte Nido.
Monte Nido is also rolling out a rebranding. It will drop the “& Affiliates” in its umbrella brand. The rest of its entities will be called Monte Nido and the keyword of the legacy brand. The legacy brands are now called Monte Nido Walden, Monte Nido Clementine and Monte Nido Rosewood.
Monte Nido is not alone in reassessing its approach to eating disorder treatment. While deadly, eating disorders represent a tiny population, especially in comparison to those with autism, mental health, or substance use disorder needs. Further, they require complicated, specialized and, therefore, expensive care that may not work on the first go-around given the potency of many eating disorders. However, the high increase in need for these services creates a compelling, if not challenging, prospect for health organizations.
This increase in demand is especially true for children. Recent medical claims data show claims for youth eating disorder services increased by 131% from 2019 to 2023.
Several other recent developments show the shakiness of the eating disorder treatment space.
Refresh Mental Health shut down its eating disorder treatment operation entirely. The diversified behavioral health companies Discovery Behavioral Health and Odyssey Behavioral Health closed facilities to adjust their footprint and focus on other priorities. All three companies focus on facility-based care.
Meanwhile, virtual eating disorder companies have been able to grow and raise funds from investors, potentially showing increased interest in the wider powers that be in offering eating disorder treatment in a patient’s home.
Earlier this year, the virtual eating disorder treatment organization Arise disclosed that it raised $5.4 million in venture funding.
Equip, one of the more developed virtual eating disorder startups, announced in September that it raised $20 million to aid its expansion from treating youth only to treating adults as well. In May 2022, it raised a $58 million Series B round.
