C3 AI shares are in freefall after the enterprise artificial intelligence company announced it's cutting 26% of its workforce and posted a loss that blew past Wall Street's worst estimates. The bombshell came as new CEO Ehikian unveiled a sweeping restructuring plan, raising fresh questions about whether enterprise AI companies can actually turn their technology into sustainable profits. The stock tanked in after-hours trading as investors absorbed the dual punch of disappointing financials and massive layoffs.
C3 AI just delivered the kind of earnings report that makes investors reach for the sell button. The Redwood City-based enterprise AI company announced it's cutting more than a quarter of its workforce while simultaneously revealing financial results that fell well short of analyst expectations, according to CNBC.
The 26% workforce reduction represents one of the most aggressive cutbacks in the enterprise AI sector since the current AI boom began. New CEO Ehikian, who recently took the helm, is betting that a smaller, leaner operation can finally crack the code on profitability that has eluded the company despite years of AI hype and substantial customer interest.
Shares cratered in after-hours trading as the double whammy of disappointing earnings and major layoffs hit the tape. The stock's collapse mirrors growing investor skepticism about whether enterprise AI companies can actually build profitable businesses around their technology, even as giants like Microsoft, Google, and Amazon pour billions into AI infrastructure.
C3 AI has long positioned itself as a pure-play enterprise AI provider, offering pre-built AI applications for industries like manufacturing, energy, and financial services. But the company's struggle to achieve profitability raises uncomfortable questions about the economics of enterprise AI software. Unlike consumer AI products that can scale rapidly, enterprise AI requires expensive customization, lengthy sales cycles, and significant implementation costs.
