How To Turn Around A Bloated Company (Without Hiring Back Into The Bloat)

Health N Sync coordinates medical care for people with legal claims, typically personal injury cases. Doctors and other providers treat patients up front and get paid out of the settlement, with attorneys managing the cases. By the time Karim Lalani took over as CEO in August 2025, the model was failing with monthly spend at $4.6 million, 203 employees and too many layers of management passing accountability up and down the chain.

Within a year, monthly expenses had fallen to $800,000, headcount to 48 and, by June 2026, the company posted its first profitable month. Lalani, managing partner and founder of Monarch Equity, who began his career in technology before moving into distressed turnarounds, says the employee reduction was the easier part to explain but the hardest to do—and he knew it wasn’t a magic bullet. “Cuts alone don’t make a business,” he says. “They just make it lose money more slowly.” The harder work was a line-by-line reconciliation of open cases with providers and attorneys, which recovered revenue that had slipped through the cracks and began rebuilding trust that had eroded.

Now at 58 employees and planning to add roughly 50 more, Lalani is wary of the trap that catches many turnarounds: cutting to profitability, then hiring right back into the same bloated structure. In this conversation with Chief Executive, he explains how he diagnosed what was broken, why cash came before the org chart, what he watched weekly to know the recovery was real and the rules he is applying to growth this time around.

When you stepped into the CEO role of Health N Sync, what did you find was actually causing the losses? Which two or three operational problems were doing the most damage?

Three things did most of the damage.

First, the company was built for volume it didn’t have. We had 203 people on payroll and an overhead structure sized for where the business hoped to be, not where it was. Bloated salaries, multiple levels of management and a ton of waste for a company that didn’t need to act like it was a F500 firm.

Second, we were locked into marketing deals that were bleeding us dry. We were spending around $2 million a month on arrangements that weren’t tied to results. The cost of bringing in a case was higher than what that case would ever return. The multiple levels of management all passed accountability to other team, and these issues were never escalated.

Third, we weren’t reliably getting paid for work we’d already done. Each department worked from their own version of reality. We became an unreliable partner, so vendors and partners dealt with each other and not us. Some payments went around us entirely, and money we’d earned simply went missing.

You’ve said monthly operating expenses fell from roughly $4.6 million to $800,000. Where did those reductions come from, and how did you distinguish waste from spending the business genuinely needed?

The cut came from two places. Salaries and operating overhead went from about $2.6 million a month to $500,000. Marketing, growth and software buildout went from about $2 million a month to $300,000.

On the business development and software side, we realized we were too rigid. Instead of optimizing our process, we forced customers into our ecosystem in an industry that is not one size fits all. We pivoted to a white glove service, creating a shell while building the details around the customers process.

On people, headcount went from 203 to 48. That was the hardest part of the turnaround. I didn’t cut by department percentage. I asked a very simple question about every role: Do these roles create and capture value? If not, we had to remove them from our plans.

What did you do first to stabilize the company, and in what order? Was the priority cash, staffing, provider relationships, customers, technology or something else?

Cash is always first! When we started in August 2025, I needed a real picture of what was coming in, what was going out and how many weeks of runway we had before I could make any other decision. In healthcare, you diagnose, treat, then maintain. We had to diagnose the most egregious expenses to save the company.

Stopping the bleeding meant exiting marketing contracts and the overbuilt headcount. It was the worst part of the turnaround. Letting go of so many people hurts, no matter how much you tell yourself it will secure long-term growth.

Third, I went after money we’d already earned. We reconciled with customers and vendors line by line, case by case, and found revenue that had been lost in the cracks. It was the fastest money available, and it also started rebuilding relationships.

Fourth, I rebuilt the team around the work that remained. We asked everyone to increase their capacity and work longer and harder. The group of employees we kept all had a similar mindset: How can we do more to help achieve our goals? It really comes down to getting your hands dirty in operations and understanding each and every facet of your business. Only then will you be able to identify the people you want to join you in your recovery and growth efforts

The company had damaged relationships with providers and partners. What had gone wrong, and what did you specifically do to rebuild trust with them?

Providers had been treating our clients on the promise of getting paid when the case settled, and too often that payment came late, came with errors or didn’t come at all. Attorneys were getting inconsistent information about where their clients’ bills stood.

The fix was the line-by-line reconciliation. We sat down with providers and attorneys and went through every open case: what was billed, what settled, what was paid and what was still owed. We were straight with them, including when the news wasn’t good.

We paid out what was owed as fast as cash allowed, gave each partner a real point of contact and set clear standards for bill reductions so nobody was surprised at settlement. Trust came back one relationship at a time, as people saw us do what we said we’d do.

You’ve gone from substantial monthly losses to profitability. What changed on the revenue side versus the cost side, and which actions made the biggest difference? What metrics told you the turnaround was actually taking hold?

The cost side moved first and moved most. Going from $4.6 million to $800,000 a month changed the math. But cuts alone don’t make a business. They just make it lose money more slowly.

On revenue, the biggest lever was the reconciliation work: recovering money we’d earned and never collected, and putting processes in place so it stopped leaking. After that came consistency: holding firm on reductions and getting paid faster after settlement.

The metrics I watched weekly:

• Cash collected vs. operating expense
• Days from settlement to disbursement
• Percentage of settled cases fully reconciled
• Recovery as a percentage of billed charges
• New business

We started in August 2025. By April 2026 we were essentially breaking even, and by June we were profitable. What told me it was real, and not just the effect of the cuts, was that referrals were climbing again and providers were taking our cases without hesitation.

Turnarounds often fail when companies cut deeply and then immediately try to grow again. How are you deciding what to reinvest in now, and what has to be true before you add roughly 50 employees?

The trap is cutting to profitability and then hiring right back into the same structure. We went from 203 people to 48, and we’re at 58 today. Every one of those 10 hires was added out of a need to increase bandwidth, not as a luxury or in anticipation of future business.

The next 50 will follow the same rule. Per-case economics have to stay positive. The current team has to be truly at capacity, not just busy. And we automate for support: We’re applying AI to the repetitive work in case management and billing so new hires can focus on answering questions and helping push our new strategic efforts.

Hiring will come in waves tied to our growth, and most of it will be in case management and accounting, because that’s where the revenue is. On marketing, any new spend has to prove itself the same way: in settled, collected cases, not leads.

In six months since breaking even, we’ve only added 10 employees. We will continue to be intentional and methodical. I don’t need to boast about having hundreds of employees—I need to ensure the employees I have trust me to make their payroll and grow their careers.

Looking back, what was the most important lesson from the turnaround that another CEO inheriting an overbuilt or underperforming company could apply in their first 90 days?

Follow the cash before you touch the org chart. In your first 30 days, find out where money comes in, where it leaks and who touches it. Most underperforming companies aren’t short on opportunity. They’re losing money they’ve already earned and spending on things that don’t connect to how they get paid.

Be honest with yourself, your team and key stakeholders. Trust is hard to gain but easily lost. Take the apology tour, offer something better than platitudes and get to work. Operators need to work long hours, get into the weeds of the business, and micromanage until you stand on solid ground.