SoundHound, a music and speech recognition company, laid off nearly half of its remaining employees earlier this month, less than a year after the company listed stock on NASDAQ.
The development has report by tech news outlet Gizmodo on Friday (January 13), citing three employees who had been laid off and an email from the company’s CEO, Keyvan Mohajer.
In the aforementioned email, Mohajer wrote: “As we plan to go public in early 2021, high-tech companies like SoundHound are the darling of the investor community.”
“Companies that can achieve high growth, despite high costs, are seen as the engine of the future economy. However, due to changing economic conditions, including high interest rates, rising inflation and recession fears, the companies with our profile have become much less attractive.”
SoundHound goes public in New York in April 2022 after playing a $2.1 billion merger with special purpose acquisition (SPAC) Archimedes Tech SPAC Partners.
Founded in 2005 by a group of Stanford graduates, SoundHound has since expanded its offerings from its old rival SoundHound app. Shazam offers a voice AI developer platform called Houndify and an enhanced voice search and assistant app called Hound.
However, the company is no exception to the macroeconomic difficulties that many technology firms are facing. And in November 2022, the company confirmed that it had laid off 10% of its staff due to “challenging market conditions”.
“We do not take this lightly, but in the face of challenging market conditions, we must move our investments into areas that continue to drive growth and allow us to serve our customers. their best,” a SoundHound spokesperson said speak in a statement to TechCrunch at that time.
The 10% reduction translates to about 45 of the company’s 450 employees.
Now, SoundHound is moving to cut its remaining staff in half despite investor concerns that SoundHound “doesn’t want to give up its people,” Mohajer said in the letter cited by the company. Gizmodo.
The company’s stock jumped 10% on NASDAQ last Friday Gizmodo The article was published after market hours that day.
Meanwhile, the staff said Gizmodo that laid-off employees were offered what was described as a “poor” severance that did not include health care.
The severance package will only be rolled out if SoundHound can raise more money, three former employees said.
“I was actually quite shocked with the way layoffs were handled… I would have expected a 17-year-old company, now a public company, to at least offer a minimum severance rate,” one of the employees said. banished quoted by Gizmodo like saying.
The company continued to record a loss in the third quarter of 2022. Its net loss skyrocketed 28.9 million USD from $23.8 million, though its revenue nearly tripled to $11.2 million from $4 million in the same period last year.
At the time, SoundHound Chief Financial Officer Nitesh Sharan said the company was “prudentially moving investments to the areas that matter most, while accelerating our path to profitability.” .
The layoffs at SoundHound come as the tech industry has shed a series of jobs in recent months.
tracking site lay off.fyi notes that 101 tech companies have made layoffs this year, for a total of 25,436 employees.
On average, that means about 1,500 employees have been laid off every day since the start of the year.
tech giants Amazon recently speak that it will eliminate “just over 18,000 roles,” larger than the previously announced 10,000.
Facebook The mother meta is also giving up about 13% of the workforce and is extending the hiring freeze to the first quarter of 2023, while TikTok’s parent company ByteDance report began laying off some of its employees in the United States and Europe in late 2022.
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