SoundHound lays down half of its staff, offering “deplorable” toughness

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SoundHound, an AI company, laid off nearly half of its remaining employees last week — nearly 200 people — in a company-wide downsizing process, according to three employees who lost their jobs and an email from the CEO seen by Gizmodo. What’s more, the former SoundHound employees are in for a hard landing. The three laid off employees told Gizmodo that their severance package includes no health care and only two weeks of termination, and that’s only if SoundHound can raise more money. If the company can’t secure additional funding, the former employees said they don’t know what will happen to them.

A former employee summed up the situation in one word: “deplorable.”

“I was really shocked at the way the layoffs went,” one laid-off employee told Gizmodo. “I would have expected a 17-year-old company, now a public company, to offer at least minimal severance pay.”

The sharp cuts come just two months after another round of layoffs that saw 10% of the company’s workforce and others cut saddled with salary cuts. SoundHound’s workforce was 450 before the layoffs, but headcount has been cut by more than 50% in just three months, according to former employees.

In an email to employees, SoundHound co-founder and CEO Kevan Mohajer described a period of rapid growth in 2021, but said changing market conditions are forcing it to reassess its financials and accelerate its path to profitability in 2023.

“When we set course in early 2021 to become publicly listed, high tech companies like SoundHound were the darlings of the investor community,” Mohajer wrote. “Companies who could achieve high growth, despite high costs, were seen as engines of a future economy. However, as a result of changing economic conditions, including high interest rates, rising inflation, and fears of recession, companies with our profile became much less desirable.”

SoundHound did not respond to Gizmodo’s multiple requests for comment.

Mohajer added personal reflection on meetings with investors to his email: “As I reflect on the feedback I received from the investor community during countless meetings over the last several months, a recurring theme was that they loved our technology, vision, perseverance, talented team, and business strategy.”

Mohajer finished with a line that’s sure to be cold comfort to both the remaining employees and those he let go: “But they were concerned that SoundHound does not have the heart to let go of its people.”

The CEO seems to have found the “heart” to lay off his people.

Though many other of the estimated The 107,000 tech workers who lost their jobs as part of the recent tech downturn have been offered convenient exit packages, and laid-off SoundHound employees who spoke with Gizmodo said that wasn’t right for them. In their case, the former employees said they would only receive two weeks’ compensation and no healthcare. One employee added that SoundHound’s human resources said the dismissal was contingent on the company raising additional funding. The employees asked not to be identified so as not to jeopardize the compensation they might receive.

SoundHound path is a file Familiar in the technology industry this year. Large companies like Amazon, Snap, and Meta expanded their workforces in 2020 after the onset of the coronavirus pandemic to face major economic headwinds in late 2022 and 2023. .

Founded in 2005 by a group of Stanford University alumni, SoundHound has become a leading provider of AI voice software used by a variety of household names. For example, music streaming service Pandora uses the SoundHound platform to allow customers to pause, play, and skip songs using just their voice. Snap uses SoundHound technology to provide real-time automatic captioning services in Voice Scan Camera Search. The company also has a pair of mobile apps called SoundHound Music and Hound, which are used to discover music as Shazam and help with voice search, respectively. SoundHound is gone General via SPAC in early 2022. The company’s clients include Mercedes-Benz, Snap, Netflix and other brands spanning many industries.

“It’s really disappointing to see SoundHound’s bright future ruined by executive decisions made in the wake of its public launch,” one laid-off worker told Gizmodo. “While it was not easy to predict the outcome of the IPO when the process began, as it became apparent that far less cash would be raised than expected steps should be taken to maintain cash flow rather than the runaway hiring that occurred.”

The major layoffs come less than two months after the company It said Moved to cut about 10% of the staff. In addition to the layoffs, an unknown number of employees at the time also took pay cuts, some as high as 20%, according to one former employee.

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