In more bad news for Israel Startup Nation, America’s Asurion is shutting down its Israeli subsidiary Soluto, costing 120 people their jobs in the country. Most will see the end of their tenures soon while about a third will be kept on until the end of the year. And as if that were not bad enough, Kornit Digital, maker of industrial inkjet printers, is firing about 30 people.
Asurion provides insurance for smartphones, tablets, consumer electronics, appliances, satellite receivers and jewelry. The company also provides repair and maintenance services. Saluto was founded in 2008 and offers similar solutions. It was acquired by Asurion in 2013.
John Leonard, Senior Vice President, Global Product Management at Asurion, explained the move to close down Saluto was a difficult one. “The decision to close the offices in Tel Aviv and part ways with the team that contributed to our company’s success over many years is not easy,” he said. “The team at Soluto had an important part in our growth and success since the company was acquired in 2013.”
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Soluto CEO Merav Oren, stated on Sunday, “We are very sad to announce that today we had to notify all of our team members at Soluto of Asurion’s decision to shut down the Israeli development center. These are people who believe in the company and the product and gave their heart and capabilities every day in order to create the best possible product for our users.”
“We brought in the best professionals in their fields to Soluto over the years,” she added, “creating a leading force in Israeli tech and maintaining a unique culture. For me personally, this is a very difficult moment. We are committed to making every effort to support and help each and every one of the employees to find an excellent workplace that will benefit from their capabilities and skills.”
As for, Kornit Digital, the 30 layoffs do not make up such a big share of the company’s total workforce of 900. It amounts to about 3.3%. There is no word yet as to what share of the employee terminations will be in Israel.
Once worth well over $2 billion, Calcalist reports that the NASDAQ listed company’s share price fell by more than 80% since the start of 2022 and is now worth just $1.34 billion.
Kornit Digital’s CEO recently explained that the company’s financial woes are linked to the current worldwide economic downturn. “We have entered a period where some of our customers are working through excess capacity built throughout the two-year pandemic period, which we expect to continue for the near-term,” he stated.
This is the fifth Israeli company to make such a move already this month, several of which are Unicorns like Next Insurance and Lightricks. And Celsius Networks filed for Bankruptcy which surely means layoffs are coming.
This trend is largely attributed to the current global inflation crisis and the steps being taken to curb it. The U.S. and Israel have both raised interest rates. That move means there will be less money for future investments so companies of all kinds are contracting, if only temporarily.
Founded in 2003, Kornit Digital boasts that it is writing the operating system for sustainable fashion and textile production on demand. Kornit says that its tech enables innovative, never-before-seen applications with agility and versatility that transcends the wastefulness and logistical complexity associated with traditional business models that rely on offshoring, complex and vulnerable supply chains, and long, forecast-based cycles.