Innoviz cuts 9% of workforce in latest round of layoffs amid financial struggles
Innoviz cuts 9% of workforce in latest round of layoffs amid financial struggles
Lidar manufacturer reduces expenses by $12 million but still faces investor disappointment and slow revenue growth.
Israeli lidar manufacturer Innoviz has announced the layoff of 9% of its workforce, accounting for about 40 employees. This follows a similar move made a year ago when it laid off 13% of its staff.
After this latest round of cuts, Innoviz will be left with 350 employees, still a relatively high number for a company that has yet to generate significant revenue and has recorded substantial losses since its founding. The company notes that these layoffs will reduce its annual expenses by $12 million.
Most of the layoffs will come from the development department, focusing on products that Innoviz believes have limited economic potential. Founded and led by Omer Keilaf, Innoviz develops advanced light and motion sensors for the autonomous vehicle market.
Innoviz was the first Israeli company to go public on Wall Street through a merger with a SPAC, initially valued at $1.4 billion. Today, it is traded at only $250 million, with investors disappointed by the slow pace of business progress.
Although Innoviz has contracts with autonomous vehicle component manufacturers, such as Israel's Mobileye, and car manufacturers like Volkswagen, these agreements have not yet generated significant revenue. To fulfill its customer commitments and avoid collapse due to cash flow issues, Innoviz requires regular capital injections. A month ago, the company announced an agreement to receive $80 million from its development partners, with $40 million expected in 2025. This agreement follows the NRE (Non-Recurring Engineering) model, which is common in the automotive industry, involving work between component suppliers and car manufacturers for the development of specific parts.
Innoviz generates almost no revenue from product sales, with most of its income coming from NRE agreements. In the third quarter, NRE revenue amounted to $4.5 million, while the company burned through $17.5 million. As of the end of September, Innoviz had $87 million left in its coffers, and many investors are concerned about its ability to complete customer developments without further capital raising. Innoviz raised $65 million a year and a half ago, but this fundraising angered investors because it was conducted at a 20% discount to the market share price, resulting in significant dilution.
