Additional layoffs at the Israeli-Singapore Trax Retail company, which develops technology for consumer product

Posted on Nov 22, 2022 by Ifi Reporter

Additional layoffs at the Israeli-Singapore Trax Retail company, which develops technology for consumer product manufacturers and marketing and retail chains: the company is about to lay off 80 employees, about 8% of its workforce, which includes 900 employees and 100 subcontractors. In Israel, the company employs 200 people, and layoffs are expected to be at a similar rate. There was no response from Trax.
The current layoff plan is still in the planning process, and the company will implement the move next week. This is the second time Trax lays off in less than six months, after extensive layoffs in June. The cuts then included the dismissal of 115 employees, 12% of its global workforce, and the Israeli development center suffered a more significant cut, of 20%.
Trax was founded in 2010 by Yoel Bar-El and Dror Feldheim, and is currently managed by Justin Behar. The company has developed a technology based on computer vision and data processing, which makes it possible to analyze images of shelves in supermarkets. The product makes it possible, for example, to identify which products are missing on the shelf and to quickly complete them, or to understand what is the best shelf arrangement to increase sales.
Behind the layoffs is the company's decision to reach a positive cash flow as early as 2023. The company realized that the scope of the previous layoffs was insufficient and that they needed to lay off more employees in order to meet the goals they had set for themselves. Batrax is affected by the state of the retail market, and to some extent also by the advertising market, but they did not foresee the strength of the effect of the economic situation on their customers.
More than two-thirds of the company's revenue comes from the US, and Trax's customers in the country are affected by the fear of a recession, interest rate hikes and inflation. Its customers include large retailers such as Coca-Cola (+1.54% 62.08) and Johnson & Johnson (+0.51% 175.97). All of its customers tend to extend their contracts with Trax from year to year, but in the current market situation they are trying to maintain their profitability. Since Trax is trying to help them get more out of the existing situation - for example, by increasing sales in a particular store - one would think that they would actually want to expand the use of its technology: to use it to collect more information or to expand its use to more stores, but they are probably more conservative at this time than what Trax envisioned.
In April 2021, Trax received a $640 million investment at a value of $2.4–2.5 billion (after money). Half of the amount went into the company's coffers and the other half was used to purchase shares from existing shareholders (secondary transaction), which also included the company's employees. The company laid off employees both at the beginning of the corona epidemic, and also in 2021, due to a desire to become more efficient following the acquisition of companies.


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