Clinc Lays Off 32% of Employees in Response to Coronavirus Pandemic

Conversational AI startup Clinc is laying off around a third of its employees, according to a report from MLive. The company’s leaders chose to lay off the staff because of the current COVID-19 pandemic and its effect on the economy.

Reducing Workforce

Clinc uses natural language processing and neural networks to create conversational AI. The company has worked with clients in several industries, especially banking and finance. The company had been on the upswing, closing a $52 million funding round last year, one of the largest in the voice tech industry, from Insight Partners and DFJ Growth.

“In light of the current global pandemic, hard decisions were made to best serve our clients and employees, and we remain focused on supporting and protecting the health of the employees impacted,” Clinc COO Lingjia Tang said in a statement. “Clinc has refocused the business on its two primary areas: providing financial institutions with exceptional virtual assistants and democratizing conversational AI platform, which best positions us to weather this storm and be set up for long-term success.”

Shifting Gears

Clinc announced the layoffs just two months after co-founder and CEO Jason Mars resigned in the wake of an investigation into inappropriate behavior complaints from employees. Co-founders Tang, who is married to Mars, and CTO Michael Laurenzano are now jointly running Clinc. The board of directors ran a five-week investigation after the complaints were filed in December. Mars resigned when the investigation ended, citing the company’s well being as the reason for stepping down.

The layoffs have not changed the company’s plans to move to a new 25,000 square-foot office in its hometown of Ann Arbor, according to the report, although construction has paused because of Michigan’s current stay-home order. Clinc had said previously said planned to grow from around 116 to 140 employees by the end of the year. The company has not said precisely how many employees have been let go. The company is far from alone in reducing its workforce. Unemployment in the U.S. has more than doubled in the last month from 4.4% to more than 10%. It may rise above 20%, according to some economists.

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