Cohere Announces 5% Workforce Reduction Amid USD 500 Million Funding Boost

Nvidia-backed AI startup Cohere, co-founded by former Google researchers, has announced layoffs affecting approximately 5% of its workforce.   

The job cuts come just a day after the Toronto-based company secured a substantial USD 500 million in new funding from a group of investors, including Cisco, AMD, Fujitsu, Salesforce, Oracle, and Nvidia, bringing the company's valuation to USD 5.5 billion.  

According to its official website, despite the layoff, Cohere is hiring in areas such as customer operations, partnerships, revenue, sales, product design, and modeling. The company currently employs around 400 people, and it remains unclear which departments or roles will be most impacted by the layoffs.  

Cohere, known for its enterprise-focused generative AI solutions, stated that the layoffs are part of a strategic realignment aimed at optimizing resources and focusing on core competencies.  

A representative from Cohere explained the decision, noting that the recent influx of capital has allowed the company to refine its strategic vision. "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. 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," the spokesperson stated.  

The decision to reduce staff reflects the challenges faced by AI startups, where rapid growth and substantial funding often come with the need to streamline operations and focus on profitability. This move is part of a larger trend in the tech industry, where companies are responding to economic uncertainties by making layoffs and concentrating on their core business areas.