Large-scale layoffs are continuing at industrial drone developer Airobotics, with the company laying off dozens more employees in Israel and Australia, sources familiar with the company say. The company will lay off at least 20 of its 140 employees in Israel and additional employees in its offices in Australia, where it has 60 employees. Airobotics laid off 25 employees in Israel last November, when it had 170 employees in Israel.
Company sources said off the record today that Airobotics CEO Ran Krauss had come from its headquarters in Arizona, to where it moved in 2018, to the company's offices in Petah Tikva to talk with all of the company's employees there. Krauss told them that the company would lay off some of its current staff as part of its restructuring aimed at streamlining and expanding its global activity, with production being transferred from Israel overseas. Most of the employees being laid off work in production. Operational, marketing, and research and development workers are also being laid off. A similar talk will take place at the company's offices in Australia.
Airobotics's management made the restructuring decision in late 2018. The company's senior management moved to Arizona and its offices in Arizona and Australia were expanded. 25-30 employees were laid off in November as part of cutbacks in operations and marketing teams in Israel and the transfer of the entire delivery department, responsible for field deployment of the company's products for customers, to the US and Australia. A number of research and development employees were also laid off.
Production in Israel shutting down
Following the layoffs last November, Airobotics told "Globes" that development in Israel would be expanded, and that several regulation, aviation, and production units would be kept here. Instead, it was learned today that the company was shutting down its production in Israel, and its marketing, operations, and research and development teams are being further reduced.
It is believed that restructuring is a result of the participation of US investment fund Pavilion Capital in Airobotics's most recent financing round. Pavilion Capital, a private fund operating in New York, specializes in investments in growth companies. In October 2018, the fund invested $30 million in Airobotics, and its representative, Mark Tan, joined the company board of directors.
Krauss and VP R&D Meir Kliner founded Airobotics in 2014. The company has raised $100 million. Airobotics develops autonomous drones for industry capable of performing tasks, filming, and gathering information in real time. The companies operates a pilot in Israel with Israel Chemicals and works with a number of mining companies in Australia. Since it was founded, it has focused mainly on the Australian market. In 2017, Airobotics's management announced that it would also begin aiming at the homeland security market and safe cities market. As far as is known, however, it has not yet begun working with large customers in this sector.
Up until 2018, Airobotics operated from Israel and Australia. It then opened an office in Arizona, which became the company headquarters. At the same time, the company's activity in the Australian market did not achieve the hoped for results. Airobotics failed to recruit enough customers and increase its revenue at an adequate pace, according to sources close to the company. The current restructuring will also include a focus on a product for the safe cities market in order to establish the company in a more limited market.
Airobotics is not the first company founded by Krauss, a serial entrepreneur. His first company, Wisec, founded in March 2011, works to this day with the Home Front Command. Its product opens bomb shelters automatically when a red alert is sounded. In 2012, Krauss went on to found BladeworX, which provided commercial drone services and was the first drones company to receive Israel Civil Aviation Authority approval for operating unmanned aircraft of up to 20 kilograms. He left the company a year later to focus on ParaZero another project he had begun simultaneously. This company focused on manufacturing parachutes for drones.
Airobotics: The center will remain in Israel
Airobotics said in response that the company was continuing its growth, and was transferring its production to the US in order to support large-scale production. As part of the transfer of its headquarters to the US, Krauss moved to Arizona, together with other management teams. The company added that it was in the midst of recruiting dozens of employees in the US. Airobotics did not respond to allegations that it was laying off both research and development and production workers, and that more layoffs would be made in Australia.
Krauss said, "Due to the transfer of production to the US, the company will cut part of its production in Israel, and will have to let go a number of employees (20 employees). It is important to emphasize that where R&D is concerned, the center will remain in Israel, and will continue growing in accordance with the company's development and growth."
Published by Globes, Israel business news - en.globes.co.il - on February 25, 2019
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