Honor — the technology-enabled in-home care provider that partners with traditional agencies through the Honor Care Network — is laying off 35 employees. The company confirmed the layoffs in an email sent to Home Health Care News on Friday.
The San Francisco Chronicle was the first to report the layoff news.
Founded in 2014, the San Francisco-based Honor’s business model revolves around agency partnerships, through which Honor takes over several difficult back-office functions, including caregiver recruiting, onboarding and training. In the co-branded “powered by Honor” agreement, Honor then receives a negotiated share of an agency’s revenue.
Positions affected by the layoffs are tied to Honor’s non-caregiver workforce, Jessica Gilmartin, Honor’s chief marketing officer, told HHCN. More specifically, the roles are related to “a few administrative and growth functions” that are no longer necessary for Honor to hit its service or growth targets in 2020, she said.
“As you know, we had record growth last year, and we expect the same level of growth in 2020,” Gilmartin said. “We’re aggressively hiring caregivers in all markets and are actively opening in new markets.”
Overall, the layoffs account for less than 10% of Honor’s non-caregiver workforce, according to Gilmartin. The layoffs account for a relatively small slice of Honor’s total operations, as the company has thousands of caregivers on its payroll.
Currently, Honor has a footprint across more than 800 cities and towns in six states. Some of its most recent agency partners include At Your Service Home Care in California, along with Affordable Home Care and Bridgeway Senior Services, both based in Detroit.
Honor didn’t always operate under its partnership model. Initially, Honor hired its own caregivers and provided care to consumers directly.
“We reviewed our 2020 plans — like most companies do,” Gilmartin said. “We looked at our headcount, asked if it’s the right group of people to hit 2020 plans … focused on growth, efficiency and service. There were a very small number of roles that Honor realized were not necessary.”
An Honor Care Network partner who joined in 2019 told HHCN he was “given a heads up” prior to the layoff news breaking. Additionally, he said Honor described the layoffs as “intentional” and an opportunity for Honor to “hit the reset” as it gets ready for further expansion.
Still, the news adds to an attention-grabbing two-month stretch of headlines.
On Dec. 5, CNBC reported that SoftBank’s Vision Fund 2 was reportedly in talks to invest upward of $150 million in Honor. Honor — which has raised more than $115 million since launching — did not comment on the rumored investment at the time.
On Jan. 6, Axios then reported that SoftBank had walked away from investing in several startups, including Honor. Citing a source familiar with a possible SoftBank-Honor investment, Axios reported that SoftBank CEO Masayoshi Son “changed his mind” and “did not personally communicate his decision or rationale” to walk away to Honor.
Gilmartin declined to comment on any interest SoftBank may have had in Honor. In terms of funding, Gilmartin said Honor does not comment on specifics, but that the company is “well-funded” to hit its growth goals in the year ahead.
Honor’s current partnership model has occasionally been made the target of scrutiny in the past, with some critics arguing that the revenue-share approach skews in Honor’s favor and leaves owners with just their book of business after an agreement is struck. Now, reports of layoffs and unrealized investments may raise additional questions, despite Honor’s public and adamant stance that it remains well-funded.
If at any point Honor does fail to meet its end of the partnership agreement, partnered agencies are free to leave at any time, Gilmartin said.
“Just like a normal contract, if we don’t achieve our SLAs (service-level agreements) and our commitments, they’re obviously able to leave the partnership,” she said.
Within the home care industry, it’s often the retention and recruitment of workers that create challenges for a company. It’s a time consuming and costly process, especially as industry-wide turnover rates hover above 80%
Honor executives have previously told HHCN that the company’s turnover stands at about 36% for caregivers — and even lower in some instances.
“It’s obviously one of the industry’s biggest challenges to hire caregivers, but that’s what we do and that’s what we do best,” Gilmartin said. “We haven’t underestimated the time, energy or money [it takes]. I think we do it better than anybody else in the industry — and we’ll continue to do so.”
While some positions were laid off, Honor will be hiring across several HQ departments, Gilmartin said.