AI startup Cohere lays off employees after raising $500 million in funding
Nickie Louise
Posted On July 23, 2024
Just a day after closing its latest funding round, generative AI startup Cohere has laid off about 20 employees, as confirmed by CNBC on Tuesday. The layoffs affected approximately 20 employees from Cohere’s total workforce of around 400.
Despite these cuts, the company is actively recruiting for positions in customer operations, partnerships, revenue, sales, product design, and modeling, according to its website.
The layoff news comes on the heels of a $500 million investment from heavyweights such as AMD, Salesforce, Oracle, and Nvidia, which boosted Cohere’s valuation to $5.5 billion—more than double its previous year’s valuation.
“Despite the cuts, Cohere is hiring in areas such as customer operations, partnerships, revenue, sales, product design, and modeling,” CNBC reported.
Cohere, founded by former Google AI researchers and backed by Nvidia, has carved out a niche by focusing on generative AI solutions for enterprises, setting itself apart from the consumer chatbot frenzy sparked by OpenAI’s ChatGPT in late 2022. In June 2023, Cohere raised $270 million at a $2.2 billion valuation, with notable participation from Salesforce and Oracle. Cohere executives have also been involved in AI forums at the White House.
“With our most recent round of financing in place, we have a clear vision for the future of Cohere, which has required some internal realignment,” a company representative told CNBC. “We will continue to aggressively hire people as we work to offer companies the most accurate, secure, and private multilingual AI solutions in the market.”
Cohere’s rise, driven by its enterprise-centric approach, distinguishes it from competitors like OpenAI and Anthropic. OpenAI, for example, projects $1 billion in revenue for 2024 and has secured over $10 billion in investments, mainly from Microsoft. Meanwhile, other AI labs such as Anthropic and Mistral are also drawing substantial support from industry giants.
However, the aggressive funding landscape for AI startups has raised concerns among some venture capitalists about the sustainability of these companies’ revenue models compared to their capital needs. Despite these worries, Cohere’s impressive revenue growth underscores the transformative potential of AI startups to disrupt traditional industries and drive innovation in the coming years.
