Tech layoffs: Nvidia-backed AI startup Cohere fires 5% workforce

Nvidia-backed AI startup Cohere has announced layoffs affecting approximately 5% of its workforce. The job cuts come just a day after the company secured a substantial $500 million in funding, valuing the company at $5.5 billion.

The Toronto-based company , known for its enterprise-focused generative AI solutions , explained the layoffs as part of a strategic realignment aimed at optimising resources and focusing on core competencies. Despite the job cuts, Cohere is actively hiring in key areas such as customer operations, partnerships, sales, and product design.

“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,” a company representative told CNBC in a statement.

Cohere's decision to reduce staff highlights the complex dynamics within the AI startup ecosystem. While the company has experienced rapid growth and secured significant funding, it has also faced pressures to streamline operations and achieve profitability. This move follows a trend of layoffs in the tech industry, as companies adjust to economic uncertainties and prioritize core business functions.