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Redwood City-based artificial intelligence company C3.ai plans to cut 71 jobs locally, including dozens of engineers and data scientists, according to a state filing.
The company filed a WARN notice with the state on Feb. 23 stating it will eliminate 18 data scientists and 45 engineering positions in Redwood City, effective April 26.
Last April, the company had over 1,000 employees.
“What I consistently hear is that every CEO is making AI a top strategic priority, and they want to realize measurable economic value from it,” CEO Stephen Ehikian said on the company’s earnings call. “It became clear to me that our cost structure was simply too high, and we were not organized correctly for the opportunity.”
Two days after the notice of 71 Redwood City cuts, the company released a disappointing third-quarter fiscal report on Feb. 25. C3.ai reported $53 million in third-quarter revenue, significantly below the London Stock Exchange Group’s estimate of $76 million.
The next day, last Thursday, C3 shares fell 17%, trading at a record low. C3 stocks are down by over 90% from their 2020 peak, with the company valued at around $1.3 billion as of March 5.
However, the company’s stock is already up nearly $2 from last week as of Thursday morning.
The founder and longtime CEO of C3.ai, Tom Siebel, stepped down in July due to health challenges, sending C3’s stock price and revenue down. Siebel’s health is at the center of a lawsuit filed in August, in which an investor accused the company of issuing misleading reports about the former CEO’s health, in violation of securities laws.
The company’s new CEO, Ehikian, outlined in a December earnings call that his leadership team has built a new financial model that “precisely allocates every human resource” and “meters every dollar of expense.”
“I believe the execution of this plan will facilitate our return to growth and provide a clear pathway to cash generation and non-GAAP profitability,” Siebel said in the call.
In January, The Information reported that the company was in merger talks with the robotic process automation startup Automation Anywhere, based in San Jose.
