Two more Israeli unicorns are implementing major layoffs. AI transcription and captioning company Verbit is laying off 60 employees out of its workforce of 580 employees including several dozen in Israel and events solution platform Bizzabo is laying off 120 employees, 30% of its workforce of 400, including 35 employees in Israel.
The layoffs at Verbit and Bizzabo follow hard on the heels of other announcements of major layoffs. Online trading platform eToro said that it is firing 6% of its workforce of 1,700 employees - about 100 employees including 55 in Israel, while video and image editing developer for mobile apps Lightricks announced on Sunday that it is laying off 80 employees, including 70 in Israel. This is a 12% cut in its workforce. Due to the economic slowdown, non-profitable tech companies are reassessing their rapid growth strategies.
Verbit, which has raised $530 million since it was founded, is implementing the layoffs as part of an extensive strategic change, which includes dividing the company into business units, which must accounts for their own individual profits and losses.
Verbit is one of the more complicated startups operating in Israel because its business model does not only include conventional software sales but also combines technology for human services, which creates a kind of "Uber" for transcribers. In order to control the market in many languages, Verbit has acquired several transcription companies, which partly explains its excessive growth over the past six months.
Verbit has over 2,000 customers in the academic, legal and media sectors and offers them transcription and captioning services. Customers include CNN and NBC as well as leading universities like Harvard, Stanford, Coursera, and the London School of Economics. About 98% of Verbit's transcription work is in English and according to cofounder and CEO Tom Livne, 2021 revenue reached $100 million, six-times the revenue in 2020.
Verbit was founded in 2017 by Livne, Eric Shellef and Kobi Ben-Tzvi. Shellef and Ben-Tzvi built the company's technical platform in the company's formative years, sold their stakes and are no longer active in the company. After the layoffs, Verbit is left with 520 employees in Israel, Ukraine and the US.
Bizzabo, which has developed software for organizing conferences and events, was chosen as "Globes" startup of 2020 after its swift pivot at the start of the Covid pandemic to adjust its platform for online conferences, and then hybrid online and physical conferences. Firing 30% of its 400 employees is the biggest cut made by an Israeli startup during the current slowdown.
Bizzabo cofounder and CEO Eran Ben-Shushan said, "This is one of the most challenging moments we have coped with since the company was founded. The decision was difficult but the right one for Bizzabo's employees, the customers and shareholders."
Published by Globes, Israel business news - en.globes.co.il - on July 6, 2022.
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