Voice AI company SoundHound has reportedly laid off half its workforce

Three former employees claim the company offered them a "pitiful" severance package.

SoundHound, the company that once said it wanted to challenge Amazon and Google’s dominance in the AI voice market, has reportedly cut about half its workforce. According to Gizmodo, the firm laid off about 200 employees last week as part of a company-wide restructuring. If Gizmodo’s reporting is accurate, the mass layoffs would mark the second staff reduction SoundHound has undertaken in less than a year. In November, the company reportedly laid off 10 percent of its workforce. Before the first round of cuts, SoundHound employed approximately 450 people.

A trio of former employees who spoke to Gizmodo described a “pitiful” severance package contingent on the company raising more money. They claim the package includes no healthcare and only two weeks of severance. The company did not immediately respond to Engadget’s request for comment. SoundHound went public via a special-purpose acquisition company in early 2022. According to data from CrunchBase, the firm has raised more than $300 million to date. SoundHound customers include Pandora, Mercedes-Benz and Snap.

In an email obtained by Gizmodo, SoundHound CEO and co-founder Keyvan Mohajer blamed the layoffs on recent macroeconomic conditions. “When we set course in early 2021 to become publicly listed, high-tech companies like SoundHound were the darlings of the investor community. Companies who could achieve high growth, despite high costs, were seen as engines of a future economy, ” he wrote. “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 desirable.” Mohajer reportedly went on to add investors “were concerned” SoundHound did “not have the heart to let go of its people.”

In the last few months, mass layoffs have been a frequent occurrence at many tech companies. At the start of November, Facebook parent Meta cut about 13 percent of its workforce, a move that saw more than 11,000 people lose their jobs. More recently, Amazon expanded the scope of its company-wide layoffs to affect more than 18,000 employees.