Ada Support, which provides an AI-powered chatbot platform for customer service teams, has permanently laid off 36 full-time employees, representing just under one-quarter of the company.
“The vast majority of businesses are taking longer to purchase new software as they assess how to recover.”
The 36 employees made up 23 percent of Ada’s team, which previously sat at 156. Ada confirmed the layoffs to BetaKit, noting this was a company-wide reduction in headcount, affecting all regions the startup operates in. Five co-op students that the startup claimed had yet to begin were also affected, with Ada noting that it chose not to proceed with those contracts.
In a statement to BetaKit, Ada explained that, while its customers have been “leaning into” its technology amid the pandemic, the company has been “forced” to reevaluate its operational expenses.
“While our customers are leaning into our technology to address massive spikes in customer service inquiries, the vast majority of businesses are taking longer to purchase new software as they assess how to recover from the impact of this pandemic,” said Ada.
“Like many startups in recent weeks, widespread near-term uncertainty has forced us to reevaluate our operational expenses,” the startup added.
Ada’s decision to reduce its headcount by almost 25 percent comes just over a month after the startup announced it had closed a $63.7 million CAD ($44 million USD) Series B round.
Announced on March 19, the round was led by Silicon Valley-based venture capital firm Accel, with participation from existing investors Bessemer Venture Partners, FirstMark, Version One, Leaders Fund, and Burst Capital. At the time, Ada said it planned to use the capital to scale and add more functionality to its chatbot.
Ben Fletcher, partner at Accel, was quoted as saying at the time that Ada was “uniquely positioned to help companies strengthen customer relationships and deliver impressive long-term value even as they may face limited resources.”
Ada did not directly respond to questions about how its recent raise affected the layoffs but said in its statement that due to its “continued growth” Ada did not qualify for federal emergency support programs for businesses, including the Canada Emergency Wage Subsidy.
The startup added it is confident it will be able to play a “critical role” in helping businesses recover from the economic impacts of COVID-19.
“Ada is well-positioned for long-term success and we remain committed to scaling our Automated Customer Experience platform to help companies reduce costs and improve customer satisfaction,” Ada said.
Along with the 23 percent, cross-organization layoffs, Ada also made “material reductions” to its marketing, travel, and other “non-headcount” budgets, the company told BetaKit.
“In making this difficult decision, we tried very hard to lead with kindness, dignity and respect, and to honour the impact everyone on our team has had on Ada,” its statement read.
Based in Toronto, Ada was founded in 2016 and is led by co-founder and CEO Mike Murchison. Ada’s chatbot allows customer support teams to provide automated responses to inbound customer requests and questions.
The platform’s natural language engine is meant to allow the chatbot to understand the meaning and context of a message without the need for perfectly constructed sentences. The company’s customers have included AirAsia, Mailchimp, Shopify, Telus, Upwork, and Zoom.
Last year, Ada partnered with Toronto non-profit Ample Labs to launch an AI chatbot for the city’s homeless community.