Cerebral to lay off workers amid federal probe

Telehealth prescription company Cerebral will initiate layoffs amid a federal probe of its prescribing practices and the recent ouster of its CEO.

Cerebral confirmed the layoffs in a statement to Becker's in a move first reported May 31 by Bloomberg. Employees will be notified by July 1.

"As part of Cerebral’s operational efficiency initiative, our leadership team is launching an organizational review that will simplify our structure, reinvest into our core business, double down on quality, and better align our operating model to best meet the evolving mental health needs of the patients we serve and enable the company to continue to grow sustainably as the leading provider of online mental health services," according to a statement from the company.

The U.S. Justice Department has been investigating the company — which virtually prescribes mental health medications, including Adderall and Xanax — over possible violations of the Controlled Substances Act.

The board of the San Francisco-based company voted to replace CEO and co-founder Kyle Roberton in May after halting prescribing of most controlled substances and changing its online ads that critics said could be fueling an addiction crisis.

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