Headspace Issues Layoffs Following Sword Health Acquisition
Behavioral Health Business
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By Ashleigh Hollowell
| October 16, 2026 | October 16, 2026 | | --- | --- | | Anna Shvets via pexels.com | |
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It has been a little over two weeks since Sword Health’s acquisition of the San Francisco-based digital therapy and psychiatry company Headspace officially closed, and now the combined entity has started to roll out post-transaction layoffs.
Public documents filed by Sword Health and Headspace part of the transaction show that Sword Health employed 624 people in the U.S. before the acquisition. The deal would have added 579 Headspace employees nationwide, bringing the combined U.S. workforce to 1,203 before layoffs.
These documents also note that the post-transaction layoffs were planned.
"Sword anticipates reducing its corporate staff to create efficiencies where redundancies exist between the two organizations after being combined," one document states.
While neither Headspace nor Sword Health would share details with Behavioral Health Business about the scope or scale of the post-acquisition layoffs, a collection of social media posts suggests that several have been made at director and senior levels, as well as in other roles.
However, it appears that Headspace’s C-suite team including CEO Tom Pickett, Karan Singh the chief operating officer, Dr. Jenna Glover the chief clinical officer, and Lisa Mulrooney Gross the chief people officer, have all retained their leadership roles at this time.
Neither company wished to comment on this story, but both were contacted.
The transaction, reportedly valued at $300 million, was a major move by Sword Health to expand further into the behavioral health space. Prior to June 2025, the New York City-based digital health provider mainly offered digital physical therapy programs focused on pain management and prevention. But it entered the mental health space with the launch of an AI tool called Mind after reaching a $1 billion valuation.
Adding Headspace’s network of clients, clinicians, and payer relationships marked a major consolidation of digital mental health organizations. A pattern that was also noticeable throughout the broader market earlier in 2026, among other transactions as well.
Moving into behavioral health was also part of Sword Health CEO Virgilio Bento’s goal to inch closer to an official IPO in the future.