Exscientia

• Action: Announced a 20-25% workforce reduction in May 2024
• Reason: Implementing efficiency measures to conserve cash while streamlining operations. Goal is to save approximately $40 million annually starting in 2025.
• Impact: Maintained focus on AI-driven drug discovery despite cuts. The company has taken steps to streamline operations by automating parts of its discovery processes through an advanced laboratory setup. Its AI-enabled tools aim to accelerate the drug discovery process.

Xaira Therapeutics

• Action: Launched in April 2024 with over $1 billion in committed capital
• Reason: Aims to develop drugs with the help of AI. It noted in a press release that it will focus on “advanced machine learning research, expansive data generation to power new models, and robust therapeutic product development.”
• Investors: ARCH Venture Partners, Foresite Labs, F-Prime, NEA, Sequoia Capital, and others

Ginkgo Bioworks

• Action: Cut hundreds of employees in 2024 and could cut more than 450 by mid-2025
• Developments: Announced a strategic partnership with Google Cloud worth over $250 million and launched a new Protein Large Language Model (LLM) and Model API

Intel chiplet

Intel

• Action: Announced a 15% reduction in its workforce, equating to approximately 15,000 employees
• Reason: To cut costs and focus on AI chip development to better compete with rivals like NVIDIA and AMD

AMD

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  Radeon RX graphics cards

  Action: Announced a 4% reduction in its global workforce, affecting approximately 1,000 employees

• Reason: To align resources with key growth opportunities, particularly in AI chip development
• Investment:
  • Increased its forecast for 2024 data center AI-enabling GPU chip revenue to more than $5 billion
  • Agreed to acquire ZT Systems for $4.9 billion
  • Acquired Silo AI for approximately $665 million
  • In November 2023, AMD inaugurated its largest global design center, the Technostar R&D campus, in Bengaluru, India. The center focuses on developing semiconductor technologies, including AI.

Dell

• Action: Cutting 12,500 jobs
• Reason and context: Reduced sales roles to reallocate resources to AI teams. Separately, the company is bolstering its AI offerings with “AI-as-a-Service” services offered directly to enterprises. The company has also teamed up with NVIDIA to offer its Dell AI Factory service, which integrates AI infrastructure, software, and expert support to assist organizations in identifying, developing, deploying, and scaling AI use cases.
• Investment:
  • Received $3.8 billion in AI server orders
  • Recorded $3.2 billion in orders for AI-optimized servers in Q2 2024
  • Maintained a backlog of $3.8 billion for AI servers

Dell AI Factory

Intuit

• Action: Announced plans to cut approximately 1,800 employees (10% of workforce) and close sites in Boise, Idaho, and Edmonton, Canada
• Reason: Reallocating resources to key growth areas, particularly artificial intelligence
• Investment and strategy:
  • Plans to hire 1,800 new workers in fiscal 2025
  • New positions focused on engineering, product development, and customer-facing roles
  • Expected reorganization costs of $250-260 million
  • Company expects overall headcount to grow in FY25 and beyond
• Context: Company had approximately 18,000 employees across 10 countries as of July 2023

Source: Wall Street Journal, July 2024

SAP

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  Christian Klein

  Action: Investing €2 billion annually in AI and restructuring plans affecting up to 10,000 jobs

• Reason: CEO Christian Klein (pictured) emphasizes the need to embrace AI. Klein has overseen strategic partnerships with top Big Tech firms, including collaborations with Microsoft and Meta, to integrate AI models into SAP’s offerings.
• Challenges: Navigating internal challenges and concerns about over-regulation in the EU

Salesforce

• Action: Announced reduction of approximately 700 employees in January 2024, or about 1% of its workforce.
• Reason and context: To focus on high-growth areas such as AI and cybersecurity. In September 2024, the company introduced AI agent-based offerings that would provide revenue independent of customers’ employee counts in contrast to its traditional user-license based revenue model
• Investment: Launched a $250 million Generative AI Fund in 2023

DocuSign

• Action: Announced plans to reduce workforce by about 6% in February 2024. Sales and marketing departments were most affected..
• Reason: Shifted focus toward AI capabilities, including Intelligent Agreement Management (IAM), which integrates AI technologies to streamline contract processes and provide deeper insights into agreement data.
• Investment: Acquired Lexion for $165 million

Klarna

• Action: The Swedish fintech company plans to reduce workforce from 3,800 to about 2,000 employees, according to the Financial Times.
• Reason and context: Increased efficiency through AI integration. The company has developed a comprehensive AI strategy that goes beyond simple automation:
  • Launched AI-powered risk assessment system that outperforms traditional credit scoring
  • In February 2024, Klarna announced its AI assistant powered by OpenAI. (See pic below.)
  • Developed specialized AI for personalized shopping recommendations
  • Created an AI-driven fraud detection system
• Impact:
  • AI virtual assistant manages two-thirds of customer service inquiries
  • AI effectively performs the work of 700 employees
  • Customer satisfaction scores have increased by 22% since AI implementation
  • Response times reduced from 30 minutes to under 2 minutes on average
• Future initiatives: Planning to expand AI capabilities into:
  • Predictive spending analysis
  • Automated merchant onboarding
  • Real-time transaction optimization

Chegg

• Action: Laid off 21% (319 employees) in 2024
• Reason and context: Competition from AI platforms like ChatGPT led to a strategic pivot:
  • Subscription numbers dropped 40% following ChatGPT’s release
  • Stock value declined by 50% in 2023
  • Shifted focus to developing proprietary AI tools for personalized learning
• Strategic response:
  • Launched CheggMate, an AI-powered study assistant
  • Partnered with Scale AI for custom language model development
  • Developing AI-powered plagiarism detection tools

Udemy

• Action: Cut 280 employees
• Reason and context: Adaptation to AI-driven market demands, including:
  • Shift toward automated content creation and curation
  • Implementation of AI-powered course recommendations
  • Development of automated translation services
• Note: Plans to rehire half of the cut positions in lower-cost markets
• Technology initiatives:
  • Launched AI-powered course creation tools for instructors
  • Also has integrated AI into its platform to allow students to take part in quizzes and ask questions.
  • Developed real-time caption and translation system
  • Created automated assessment and grading capabilities

Pixar

• Action: Cut roughly 14% of workforce in May 2024
• Reason and context: Part of Disney’s broader cost-cutting initiative, but with significant technological developments:
  • Investment in AI-enhanced animation tools
  • Development of automated background generation systems
  • Creation of AI-assisted character movement algorithms
• Note: While AI tools not explicitly cited as reason for layoffs, the company has:
  • Established an internal AI ethics committee
  • Created guidelines for AI use in creative processes
  • Developed hybrid human-AI animation workflows

Pocket FM

• Action: Terminated contracts with approximately 200 writers in July 2024
• Reason and innovations: Partnership with ElevenLabs for AI-driven audio content creation, including:
  • Development of dynamic storytelling algorithms
  • Implementation of personalized content adaptation
  • Creation of AI-powered voice synthesis for multiple languages
• Technology implementation:
  • Real-time story adaptation based on user engagement
  • Emotional response tracking and content optimization
  • Automated translation and localization systems