SoundHound Lays Off Nearly Half of Its Workforce

Voice AI company SoundHound laid off 200 people, roughly half of its workforce, in a huge downsizing operation last week, Gizmodo reports(Opens in a new window). 

According to three of those recently laid-off employees who spoke to Gizmodo, the offered severance package includes just two weeks of severance and does not include healthcare. The employees added that the severance is dependent on if SoundHound can raise more money, with it being unclear what will happen if the Voice AI company fails to secure extra funding.

SoundHound was founded in 2005 by Stanford graduate Keyvan Mohajer, who is currently still its CEO, and the Santa Clara company is now a major provider of AI voice software for companies such as Pandora, Snap, Mercedes-Benz, and Netflix. 

One employee who spoke to Gizmodo described the mass layoffs and the provided severance deal as “pitiful,” adding, “I was expecting a 17 year old company, which is now a public company, to at least provide bare minimum severance.”

In an email to staff about the layoffs, Mohajer blamed “changing economic conditions, including high-interest rates, rising inflation, and fears of recession” which he said has made companies like SoundHound “much less desirable.” 

The layoffs mark a dramatic turn of events for the Voice AI firm, after rapidly growing in 2021 and becoming a publicly listed company last year. The first signs of trouble became apparent in November 2022, when 10% of its staff were laid off(Opens in a new window) and the pay of current staff was cut. 

That layoff combined with this one means that in the past three months, SoundHound has lost over 50% of the 450 employees it had in October 2022.

One of the employees told Gizmodo that pay cuts instated in November were as high as 20%, though it is unknown how many employees were affected.

SoundHound did not immediately respond to PCMag’s request for comment.