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# Heidi Cuts Jobs, Going Against Incumbents, Trust as a Moat
- URL: https://marginsofcare.com/heidi-cuts-jobs-going-against-incumbents-trust-as-a-moat/
- Published: 2026-11-05T21:17:05.000Z
- Updated: 2026-11-05T21:17:05.000Z
- Author: Eva Worst

A few hours after I published yesterday’s [article](https://marginsofcare.com/down-the-cost-ladder-the-end-of-the-health-tech-market/), where I wondered if we are on the cusp of a significant market change, Heidi [announced](https://www.heidihealth.com/en-gb/blog/changes-to-our-team-at-heidi) they are cutting 18% of their workforce.

In a report by [AFR](https://www.afr.com/technology/heidi-health-slashes-18pc-of-staff-a-day-after-two-co-founders-quit-20261105-p61bfl), CEO Thomas Kelly points out Heidi’s current trajectory is falling short:

> “The feedback we got \[from investors\] changed our perspective on where we will need to be at the end of next year to actually be an attractive company to either get investment or just to own our own destiny,” said Kelly.

> “We have to be careful about the investments we make because even if we triple revenue with Scribe, the next investor might not be there.”

Just 2 months prior Heidi closed a [$340m USD funding round](https://www.heidihealth.com/blog/heidi-secures-us340m-to-scale-agents-across-health-systems-globally) \- $100m as a standard equity and [$240m as a “growth loan” of a sort](https://www.generalcatalyst.com/stories/the-unbundling-of-growth-equity), which they only need to repay if revenue comes in.

This explains why tripling the Scribe revenue won’t be enough - that revenue is going to be immediately booked to repay that $240m loan, leaving little on the table for Heidi’s equity value. What’s more, the scribe space is getting more crowded by the day, seeing both external and internal competition, so that it’s unclear how durable the competitive advantages are of a stand-alone third-party scribe app.

I wrote about [Heidi’s Achilles heel](https://marginsofcare.com/best-vs-most-integrated-product-heidis-achilles-heel/) few weeks ago, explaining why I think they are vulnerable to incumbents like Microsoft, which can win customers even if they offer worse product experience. This job cuts news just confirms the realities of that risk. If Heidi is to go head-to-head with big players, they need to find a reliable growth lever that delivers a higher ROI, one that pays back enough for two.

Directionally speaking, there are two possible paths: going vertical towards the EHR/HIS and the PMS/PVS, either integrating with them or building a new clinical OS; or going horizontal and covering as many scribing scenarios as possible, building a competitive advantage [on the hardware side](https://www.heidihealth.com/de-de/hardware).

AI enabled new startups to launch cool new products and now that same AI enables incumbents (and hospital IT departments) to quickly catch up on that functionality, leaving the up starts out. But even if AI doesn’t seem to directly change the power distribution, history teaches us that the winners of one era are never the same as those in the next; at least not within the same categories. [AI removed the software development bottleneck](https://marginsofcare.com/down-the-cost-ladder-the-end-of-the-health-tech-market/), but also brought us to the next one - trust. And trust is just a very different type of problem to solve for, which is where the next opportunity lies.