Automatic, manufacturer of the Smart Driving Assistant, has announced that it has to make 24 of its employees redundant in a bid to boost profitability. The redundancies equate to about 28 percent of its total workforce.
Automatic said that the layoffs are distributed across the organization, impacting those in engineering, support, quality assurance, and other areas.
CEO Thejo Kote called it one of the “toughest decisions” he had to make explaining that the move was necessary in order to allow Automatic to focus on two market channels that have proven successful: Auto insurance and fleet management.
This new focus is expected to pave the way to profitability following company revenue growth of around 400 percent from 2014 to 2015. Kobe added that:
“Ultimately I came to the decision that this was the right thing to do for the long-term, for the health of the company, and to reach profitability.”
Founded in 2011, Automatic has been working to build up the automotive cloud. The company’s first product — an adapter that monitors your vehicle — was aimed at consumers. But as the connected car landscape has exploded, Automatic has opted to pursue opportunities beyond the consumer space.
As part of a its relationship with the auto insurance industry, Automatic has signed partnerships with four major carriers, although Kote would only disclose relationships with two – Liberty Mutual and USAA, which is an investor. However, he said that providers were willing to use the platform because of the user experience, the design, and the fact that it was provided by a third party, which ensures that the data is more transparent.
As for fleet management, Automatic’s adapters can be used to obtain information on a driver’s performance employed within a fleet company. The platform can also be used to provide insights and feedback to drivers, Kote said, many of whom may not often get such feedback from their supervisors.
Concentrating on these channels meant, according to Kobe, that it didn’t “make sense to have dedicated teams focused on the consumer product,” Kote remarked. “We found the areas that bring the most sustainable and fast growth over the next 18 months.”