SoundHound Raises $25M After Laying Off Nearly Half Its Staff
SoundHound, a Speech AI company that placed Discount 40% his employees earlier this month, announced this on Tuesday it had successfully raised $25 million in capital investment. This funding brings Good news for the laid-off employeesthree of them until now said What puny Compensation was offered to them– only two weeks, no health insurance—was dependent on SoundHound securing new investments, as exclusively reported by Gizmodo.
SoundHound was blunt in a statement on the investment: “Confirmation of our funding news and that former employee severance pay will be paid under the terms of the termination agreement,” a company spokesman wrote. When the publicationalthough, three Laid-off employees say they haven’t heard any new information from their employer regarding their severance packages. The company declined to answer questions about whether it is working with ex-Employee.
The company announced the new investment in a press releasedeclaring that the funds are from a “Diverse group of financial and strategic investors,” said SoundHound It’s also in the process of refinancing its current debt and going into debt“Minimal dilutive facility.” That’s what the company said awaits the new funding plus his recent downsizing could result in cost savings “Over $60 million” For the financial year.
Former employees who lost their jobs in the layoffs estimated the company had to lay off around 200 employees. SEC Submissions Information filed by the company earlier this month shows that it expects to incur between $4.4 million and $5.2 million in fees related to severance, employee benefits and stock-based compensation. The company remained optimistic about its future in a statement, anticipating “an explosion in conversational AI.”
SoundHound – which went public at the beginning of 2022 via a SPAC Valuation of $2.1 billion– includes high profile brands such as Mercedes-Benz, Snap, Netflix and others to its customer base. The company also has a pair of mobile apps called SoundHound Music and Hound that are used for music discovery like Shazam and for Voffice search help
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Despite the former success and rapid growth, the company, like so many others in the tech industry, experienced a turning point in the past year. November SoundHound quit about 10% of the workforce and imposed pay cuts of up to 20% for others. This damage was just the beginning. Less than two months later, Gizmodo broke the news that the company enacted even stricter cuts. There Former employees, estimated at the time of the layoffs, took a toll on nearly half of the company. SoundHound’s recently released SEC filings claim it has reduced its workforce by around 40%.
“When we charted the course to go public in early 2021, high-tech companies like SoundHound were the darlings of the investment community,” SoundHound CEO Keyvan Mohajer wrote in a note to employees earlier this month. “Companies that were able to achieve high growth despite high costs were seen as the 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 attractive.”
Although tech layoffs are nowadays unfortunately like sand on the sea, former SoundHound employees who spoke to Gizmodo expressed dismay at the “pathetic” severance packages they were offered, especially compared to the generous exit offers other tech companies had been offering in recent months. Worse, employees expressed confusion and frustration at the company’s decision to make severance dependent on additional funding.
“I’m actually quite shocked at how the layoffs were handled,” one of the laid-off employees told Gizmodo earlier this month. “I was expecting a 17-year oldd company, which is now a public company, to pay at least a minimum settlement.”
https://gizmodo.com/soundhound-ai-raises-25-million-layoffs-half-company-1850026531 SoundHound Raises $25M After Laying Off Nearly Half Its Staff