C3.ai Layoffs 2023: What to Know About the Latest AI Job Cuts
Source: shutterstock.com/cono0430
As fast as the artificial intelligence (AI) sector is growing, it isn’t immune to layoffs. Today, C3.ai (NYSE:AI), a company that has seen tremendous growth this year, announced job cuts, citing “the need for cost savings.” Despite rising more than 150% year-to-date (YTD), AI stock has been struggling lately. Indeed, C3.ai’s recent performance supports the argument from some experts that shares are fundamentally overvalued. Now, the company is clearly focused on reducing expenses in an attempt to turn things around in 2024, but the C3.ai layoffs still pose some questions for investors.
Since the historic launch of ChatGPT, we have seen an AI gold rush that has minted a new generation of millionaires. But do C3.ai’s troubles mean the party is starting to end? Let’s take a closer look.
What the C3.ai Layoffs Mean for AI Stock
As of this writing, most information about the C3.ai layoffs hasn’t been released, including the number of jobs or the specific departments that have been impacted by the cuts. What is clear, however, is that the market isn’t reacting well to this news. Shares of AI stock plunged this afternoon — seemingly with no warning — closing the day down by 4.3%. These declines may also continue on further details regarding the job cuts. As Bloomberg reports:
“Managers framed the cuts as related to the performance of the individual workers rather than layoffs, and many of those fired received only one month of severance, according to the people, who asked not to be identified discussing internal company information. The scope of reductions couldn’t immediately be established. The company made similar cuts about six months ago and also labeled them performance-management, the people said. C3 had 914 employees at the end of April, according to a filing.”
This news comes just after C3.ai announced it would be expanding its partnership with Amazon (NASDAQ:AMZN) to provide AI solutions for Amazon Web Services (AWS). Layoffs do not always mean that a company is in trouble. However, in the case of a company like C3.ai, it’s difficult not to be concerned. While AI stock could see a turnaround in 2024, its future appears uncertain at the moment.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
