AI Startup Heidi Cuts 108 Jobs After Securing $475 Million
Melbourne-based AI scribe firm reduces workforce while two co-founders announce their departure from operations.
1Significant Workforce Reduction
Melbourne-based AI scribe startup Heidi is cutting 108 positions, representing 18 percent of its total workforce. CEO Thomas Kelly announced the layoffs on Thursday, stating the move aims to rebalance the team around core markets and investments. The company claims this restructuring is necessary to support long-term growth and customer impact.
2Co-founders Exit Operations
The layoffs coincide with the departure of two co-founders, Waleed Mussa and Yu Liu. Mussa, who managed finance and corporate affairs, is stepping down to spend time with family. Liu, the lead technology architect, will transition into an advisory role focused on hardware and models until the end of March next year.
3Recent Capital Injection
This restructuring occurs only weeks after Heidi raised $475 million in a deal led by Blackbird Ventures. The September funding round valued the company at $1.26 billion and included a $240 million facility from General Catalyst. Despite the fresh capital, the firm is now prioritizing specific markets to ensure sustainable future operations.
4Market Reach and Scale
Heidi currently operates in over 190 countries, claiming a market-leading position in Britain and the Asia-Pacific region. Its software, which automates clinical notes during doctor-patient consultations, supports nearly 3 million interactions weekly. In Australia, the platform is deployed at major institutions including the Royal Children’s Hospital Melbourne and Children’s Health Queensland.
5Competitive and Regulatory Tensions
The company is currently embroiled in a public dispute with Best Practice, a Sonic Healthcare-backed firm. Best Practice warned that using Heidi’s new AI agent with its software violates license conditions, citing data integrity concerns. CEO Thomas Kelly has countered these claims, raising concerns regarding potential anticompetitive conduct by the established software provider.
6Rapid Revenue Growth
Heidi has experienced explosive growth, with annual recurring revenue reaching $50 million in April. This figure marks a significant increase from the $1 million reported just two years prior. Despite this rapid expansion, the company is now forced to streamline operations to maintain its competitive edge and continue product development cycles.
7Broader Tech Sector Trends
Heidi’s layoffs reflect a wider trend of workforce reductions across the Australian technology sector. Notable companies like Canva, Atlassian, and WiseTech Global have recently announced significant job cuts. These moves often follow periods of rapid scaling, as firms adjust to changing market conditions and the evolving landscape of generative AI integration.
8Future Strategic Focus
Moving forward, Heidi intends to focus on markets and products that deliver the highest value. While the company is reducing staff, it continues to hire for key roles deemed essential for its next phase. Investors like Blackbird maintain support for the decision, emphasizing the need to prioritize impact over broad expansion.
Original article: WA Today - Technology — AI Startup Heidi Cuts 108 Jobs After Securing $475 Million