SoundHound — maker of the voice AI technology used by Mercedes-Benz, Deutsche Telecom, Snap and Mastercard and more — has laid off about 10% of its workforce amid ongoing economic turmoil across global markets.
The Santa Clara-headquartered company — which went public via a SPAC in April of this year — announced the decision to its employees on Wednesday. Alongside that, it also imposed salary cuts for some of those not laid off. The company did not specify the details of the salary cuts, nor how many were affected.
“Yesterday, we announced to our SoundHounders that we are taking actions to streamline our company, including an approximate 10% reduction in workforce. We don’t take this lightly, but in the face of challenging market conditions, we must channel our investments into the areas that continue to drive growth and allow us to best serve our customers. We’re extremely grateful to the departing colleagues that have contributed to our success as a leading voice AI platform,” said Fiona J McEvoy, a director of corporate communications at SoundHound, in a statement emailed to TechCrunch.
SoundHound has a total headcount of 450 employees — meaning that the layoff has impacted around 45 people. The company will likely share more details during its Q3 earnings call later today.
Founded in 2005, SoundHound offers its voice AI platform in 25 languages. It powers voice-enabled experiences in a number of the cars provided by Hyundai, Mercedes-Benz and Honda. Earlier this month, the company also tied up with Samsung’s Harman International to offer fully OEM-owned and branded in-vehicle voice experience to several vehicles.
Alongside offering its standalone platform to companies, SoundHound has two mobile apps, namely SoundHound Music that works similar to Apple’s Shazam and lets users discover music playing around them and Hound that offers voice-based search and assistance.
In November last year, SoundHound announced it would go public via a SPAC transaction with blank check company Archimedes Tech SPAC Partners at a nearly $2.1 billion valuation. It was over 5x what Apple paid for its competitor Shazam, a $400 million announced in December 2017 and closed in September 2018.
But its fortunes as a public company have been mixed. In its last quarterly results for the second quarter that ended on June 30, SoundHound reported a 26% year-on-year revenue drop to $6.2 million, while Q2 net loss spiked to nearly $31 million, compared to $15 million in the same quarter a year before.
And its market cap, like that of many tech companies at the moment, is not doing very well. It’s currently trading at around $2/share with a market cap of $406 million.
SoundHound has become another tech company to take the layoff route during this economic slowdown. In addition to recent layoffs announced by Facebook owner Meta and Twitter, others including Netflix, Salesforce, Spotify and Tencent and many others have cut collectively tens of thousands of jobs in the last several months. Indian startups such as Byju’s, Ola and Unacademy have also laid off hundreds of employees to reduce their operating expenses amid dip in funding and investments.