OrCam cuts almost half of workforce in second round of layoffs in four months
OrCam cuts almost half of workforce in second round of layoffs in four months
Amnon Shashua’s startup is laying off 100 employees, primarily in marketing and sales, four months after cutting 50 jobs
Only three months after firing 50 employees, Amnon Shashua's OrCam is cutting its workforce again. This time, the company will lay off 100 employees, primarily marketing personnel for its reading glasses for the blind in Israel and the USA. This represents about half of the remaining employees after the February layoffs. The company will now focus mainly on sales through distributors and continued development of hearing systems.
The reason for the cuts, according to estimates, is a sharp decrease in sales to Arab countries, some of which do not have diplomatic relations with Israel. A significant portion of the expected revenue for the company, founded and managed by Amnon Shashua of Mobileye fame, comes from these countries. The company concluded that these effects will not subside until the end of 2024, complicating the planned IPO.
OrCam stated: "Due to the ongoing process of splitting the hearing and vision divisions, combined with a challenging business climate, the company is required to enhance efficiency processes. Reducing operating costs will help the company focus its activities, accelerate the transition to profitability, and prepare for raising capital when market conditions allow."
While sources close to OrCam said the war also played a role in the drop in sales, the development of generative artificial intelligence technologies that perform functions similar to OrCam's reading device for the blind using smartphones has also contributed to this decision. As a result, the company, now managed by Elad Serfaty, has decided to concentrate on developing hearing aids.
OrCam, founded by Shashua and Ziv Aviram, planned to go public during the COVID-19 pandemic after it approached a revenue rate of $100 million and profitability. In March 2021, it raised $50 million at a valuation of $1.5 billion, aiming for a valuation above $2.5 billion in the IPO. However, these plans have stalled due to the war and the freeze on purchases from Arab countries, which were a significant growth engine for the Israeli company. At its peak, the company employed about 400 workers. It conducted the first round of layoffs at the end of 2022, laying off several dozen workers. In February 2024, it laid off 50 more workers, leaving 220 employees before the current round of layoffs.
