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US enterprise AI firm C3 cuts 26% of staff under new CEO
C3.ai, a software company, announced it is reducing its global workforce by 26% as part of a restructuring effort under new CEO Stephen Ehikian, who took charge in September 2025.
The company, which had about 1,181 full-time employees as of April 30, 2025, expects to incur US$10 million to US$12 million in restructuring charges this fiscal quarter.
It also plans to cut non-wages-related costs by around 30% by late 2027.
For the third quarter, C3.ai reported an adjusted net loss per share of US$0.40, wider than analysts’ average estimate of US$0.29, according to data compiled by LSEG.
The company expects fourth-quarter revenue between US$48 million and US$52 million, sharply lower than estimates of US$77.5 million.
C3.ai projected an annual adjusted loss from operations of about US$219.5 million to US$227.5 million, compared with a loss of US$324.4 million in fiscal 2025.
The company’s shares fell 20% in extended trading after the announcement.
🔗 Source: Reuters
🧠 Food for thought
Implications, context, and why it matters.
Restructuring follows steep declines in revenue and gross margin
- C3.ai posted weaker results with larger losses and a lower fourth-quarter revenue outlook.
- Third-quarter revenue dropped 46% from a year earlier to $53.3 million 1.
- GAAP gross margin slid to 17% from 59% a year earlier 2.
- Subscription revenue sank 43.8% year-over-year 1.
- Non-GAAP operating loss rose to $63.4 million from $23.1 million.
- The company plans a 26% cut to its global workforce and aims for about a 30% reduction in non-wage costs by late 2027.
Federal, defense, and aerospace bookings rise while commercial focus remains
- Government work has become a brighter area as commercial demand cools.
- Bookings in the federal, defense, and aerospace segment jumped 134% year-over-year and made up 55% of quarterly bookings 3.
- C3.ai has not said it will exit commercial markets; it also cited more commercial customer expansion in asset-intensive operations plus complex supply chain environments 2.
- The mix adds a warning for enterprise AI vendors.
- Selling a broad AI platform can prove tough, so resilience may come from narrower niches such as government contracting.
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