Artificial-intelligence company Cohere Inc. has laid off around 20 employees, one day after announcing the close of a US$500-million financing round that valued the Toronto-based company at US$5.5-billion.
The company employed around 250 people at the start of the year and has a goal of doubling its head count by the end of 2024. The layoffs affected multiple Cohere offices. It also has locations in San Francisco, New York and London.
“With the closing of our D round, 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,” said Josh Gartner, Cohere’s head of communications.
Middle management positions were affected by the layoffs, according to a person familiar with the matter. The Globe and Mail is not identifying the source because they are not authorized to speak publicly.
Cohere announced a Series D financing round on Monday that was led by the Public Sector Pension Investment Board and included new investors Cisco Systems Inc., AMD Ventures, Fujitsu Ltd., Magnetar Capital and Export Development Canada.
Cohere’s valuation has more than doubled since its last round of financing in June, 2023, as investor interest in generative AI shows little sign of slowing down.
Cohere builds large language models, or LLMs, that power chatbots and other AI applications. It competes with OpenAI, Anthropic, Google and Meta Platforms Inc., all companies with deep pockets to invest in AI. Cohere is focused on enterprise customers and builds models tailored to business needs, including methods to reduce mistakes and hallucinations, a problem whereby LLMs make up information.
The company is seen as a Canadian leader in AI. Both Prime Minister Justin Trudeau and Finance Minister Chrystia Freeland congratulated Cohere on the financing deal Monday on X, the social-media platform formerly known as Twitter. “You’re building a bright future for the industry here,” Mr. Trudeau wrote.