SoundHound, a voice AI firm that laid off 40% of its staff earlier this month, introduced Tuesday that it had efficiently raised $25 million in fairness funding. That funding brings excellent news for the laid off workers, three of whom beforehand stated what measly severance they have been supplied—simply two weeks, no medical insurance—was conditional upon SoundHound securing new funding, as solely reported by robotechcompany.com.
SoundHound was blunt in an announcement on the funding: “Confirming our funding information and that former worker severance will likely be paid per the phrases of the severance settlement,” an organization spokesperson wrote. As of publication, although, three laid off staffers say they nonetheless haven’t heard any new info from their employer relating to their severance packages. The corporate declined to reply questions on whether or not it had communicated with ex-staff.
The corporate introduced the brand new funding in a press launch, explaining the funds come from a “various set of economic and strategic buyers.” SoundHound stated it’s additionally within the means of refinancing its present debt and shifting right into a“minimally dilutive facility.” The corporate stated it expects the brand new funding plus its latest workers reductions might end in price financial savings “in extra of $60 million” for the fiscal yr.
Former staff who misplaced their jobs within the layoffs estimated the corporate minimize round 200 workers members. SEC filings submitted by the corporate earlier this month present it expects to tackle $4.4 million to $5.2 million in prices associated to severance funds, worker advantages, and share-based compensation. The corporate remained optimistic about its future in an announcement, anticipating “an explosion in conversational AI.”
SoundHound—which went public through a SPAC in early 2022 at a $2.1 billion valuation—consists of excessive profile manufacturers reminiscent of Mercedes-Benz, Snap, Netflix, and others amongst its buyer base. The corporate additionally has a pair of cellular apps referred to as SoundHound Music and Hound, that are used for music discovery like Shazam and for voice search help, respectively.
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Regardless of its former success and interval of speedy development, the corporate, like so many others within the tech business, noticed its fortunes flip final yr. In November, SoundHound laid off round 10% of its workers and imposed wage reductions of as much as 20% for others. That injury was only the start. Lower than two months later, robotechcompany.com broke the information that the corporate was enacting much more extreme cuts. Three former staff estimated on the time the layoffs took out practically half the corporate. SoundHound’s lately launched SEC filings declare it decreased its workforce by roughly 40%.
“After we set course in early 2021 to develop into publicly listed, excessive tech corporations like SoundHound have been the darlings of the investor neighborhood,” SoundHound CEO Keyvan Mohajer wrote in a notice to workers earlier this month. “Corporations who might obtain excessive development, regardless of excessive prices, have been seen as engines of a future economic system. Nonetheless, because of altering financial circumstances, together with excessive rates of interest, rising inflation, and fears of recession, corporations with our profile turned a lot much less fascinating.”
Although tech layoffs are sadly a dime a dozen today, former SoundHound staff talking with robotechcompany.com expressed horror with the “pitiful” severance packages they have been supplied, significantly when in comparison with the beneficiant exit providing offered by different tech companies in latest months. Worse nonetheless, staff expressed confusion and frustration over the agency’s determination to make severance conditional upon further funding.
“I’m really fairly shocked by the best way the layoffs have been dealt with,” one of many laid off staff advised robotechcompany.com earlier this month. “I used to be anticipating a 17-year-old firm, which is now a public firm, to at the least present naked minimal severance.”
