Another bad news for an AI company: C3.AI announced layoffs in multiple departments, causing its stock price to plummet more than 10% during trading hours.
After the news came out, C3.AI, which had risen more than 8% during the trading session, quickly turned down, hitting a daily low and falling 6.7% intraday, a drop of nearly 14% from the daily high. C3.AI is said to have taken action to reduce costs. Its spokesperson later stated that the company regularly eliminates underperforming employees.
Another bad news has emerged in the field of artificial intelligence (AI) following OpenAI.
On Monday, November 20th, Eastern Time, it was reported that C3.ai, an AI software company in the United States, had laid off employees in multiple departments. Last Thursday, during a meeting with hundreds of employees, a C3.ai executive stated that the company needed to cut costs.
After the news broke, C3.ai, which had previously risen more than 8% during trading hours, quickly plummeted during the afternoon session. It fell below the $31.40 level, which had seen a more than 7% increase earlier in the day, and dropped to as low as $27.34, a 6.7% decrease from the day's high and nearly a 13.8% drop overall.
Insiders revealed that in the recent layoffs, C3.ai managers based their decisions on individual performance rather than directly linking them to the layoffs. Many of those who were laid off only received one month's severance pay.
It is currently unclear how many C3.ai employees have been affected. However, insiders stated that C3.ai conducted similar layoffs about six months ago, also under the guise of performance management.
In a subsequent statement, a spokesperson for C3.ai stated that the company continues to recruit and fill vacant positions to drive the development of its strategic areas. They also mentioned, "We currently have 109 vacant positions. Like many high-performance companies, we regularly eliminate employees with lower performance."
C3.ai's stock price ultimately fell more than 4% on Monday, closing slightly above $28, reaching a one-week low since the previous Monday. As one of the AI concept stocks, C3.ai has accumulated a gain of around 150% since the beginning of this year. However, by the close of Monday, it had fallen more than 30% from its peak during the AI frenzy in mid-June.