AI voice startup faces second round of layoffs amid difficulties in financing due to high Intrerest Rate environment.

Recently, reports have indicated that an artificial intelligence startup focused on voice recognition software has conducted layoffs. About 20% of the company's employees, approximately 20 people, have been laid off. It is reported that this is the second round of layoffs for the company this year. The company's CEO stated that the main reason for the layoffs is that the high Intrerest Rate environment has made it difficult for startups to secure funding.

This company, established in 2015, has received support from several well-known investment institutions. However, the company is currently facing competitive pressure from open-source voice recognition software and technology giants.

In a recent email to employees regarding layoffs, the company's executives mentioned the difficulties in the fundraising environment for startups, macroeconomic challenges, and the company's performance over the past year. The laid-off employees include data scientists, researchers, and engineers.

Although this round of layoffs has not attracted widespread attention, it reflects the immense pressure that AI startups are facing in this rapidly changing era.

The company's CEO stated in a statement: "Given the signal from the Federal Reserve that 'high Intrerest Rates will last longer', we cannot afford to wait for the market to provide additional funding in the next year or so. We must adopt a conservative strategy to control cost growth as much as possible and focus on the company's benefits."

Despite the company just experiencing its "best quarter" since its inception, the CEO refused to disclose specific revenue figures. Last autumn, the company announced it raised $47 million, along with funding from 2021, totaling $86 million, which brought the company's valuation to $267 million.

In the past year, although many private software startups have been laying off employees, AI has remained a highlight of startup financing, as the wave of generative chatbots and image generators has attracted significant interest from founders and investors. However, as more companies enter the market, some previously high-performing AI startups are beginning to face challenges.

The company's predicament also highlights the potential impact of open-source software on proprietary AI, which is one of the hottest topics in the industry. Although open-source large language models are currently not as powerful as proprietary models, the gap is gradually narrowing.

Unlike large language models, speech recognition software has been commercialized for decades and promoted through various voice assistants. This company provides speech recognition services to enterprise clients, claiming that its solutions are more accurate, faster, and better suited for business operations than existing options.

However, as large tech companies improve their voice-to-text generation services and other startups launch similar products, enterprise clients are starting to cut their budgets for commercial software, making it difficult for software providers to secure new business.

Despite the challenges, the company's CEO remains confident that they can cope with the competition due to their higher and more precise product quality. He also believes that the launch of open-source speech recognition software will help the entire industry understand the potential of AI speech recognition software.