Former unicorn Hailo cuts 50% of workforce amid funding pressure and strategic reset
Israeli semiconductor company lays off 110 employees while shifting focus toward drones, robotics, and Physical AI.
Israeli AI chipmaker Hailo announced on Monday that it will reduce its workforce by approximately 50%, as part of a restructuring aimed at streamlining operations and sharpening its focus on emerging Physical AI markets, including robotics and drones.
Several months ago, the company implemented organizational changes designed to accelerate the adoption of its AI-powered camera products and expand its presence in Physical AI applications. At the same time, Hailo's flagship products, AI accelerator chips for edge devices, have reached significant commercial scale, with more than 500,000 units sold to date.
The company said these chips are now distributed through an extensive global network of partners and resellers, reducing the need for large internal customer support and deployment teams.
As part of the restructuring, approximately 110 of Hailo's 220 employees will leave the company. Hailo said the move is intended to create a leaner and more efficient organization capable of supporting growth in its target markets while providing greater flexibility for potential investors or strategic buyers.
The company added that it will provide support and assistance to employees affected by the layoffs.
"The semiconductor industry in the AI era has become part of the critical infrastructure of every nation," said Hailo CEO Orr Danon. "We are seeing artificial intelligence move beyond the cloud and into the physical world, with expectations for tens of millions of AI-powered IoT devices, drones, and robots in the coming years."
Danon added: "The steps we are taking today will allow us to maintain our technological leadership and continue creating value for both existing and future customers. Our ambition remains to enable every edge device to become smarter. We thank our employees for their dedication and contribution throughout this journey and remain committed to supporting those we must part with during this difficult transition."
Financial statements from Delek Automotive, which owns a 12.1% stake in Hailo, revealed on Monday that the AI processor manufacturer's expected merger with a SPAC to raise critical capital had fallen through. The deal was meant to take place at a substantially lower valuation than previous fundraising rounds, forcing Delek Automotive to record a sharp loss on its investment.
The report in April also highlighted Hailo’s urgent cash flow needs. In January 2026, Delek Automotive provided a $9 million loan at an interest rate of 1.5% per month, which could rise to 3% if a liquidity event is not completed within a year.
Founded in 2017 by Orr Danon, Avi Baum, and a group of Unit 81 alumni, Hailo develops dedicated processors for AI tasks at the edge. In 2021, the company became a unicorn after raising $136 million at a valuation of about $1 billion. In April 2024, it completed a Series C extension of $120 million, increasing its valuation to $1.2 billion. The round was led by notable investors including the Zisapel family, Alfred Akirov, and Gil Agmon, and coincided with the launch of the Hailo-10 accelerator for GenAI applications.
However, 2025 and early 2026 brought signs of change, including the January 2026 layoff of approximately 10% of Hailo’s workforce as the company refocused on robotics. Now, Hailo faces a challenging capital market and an urgent need for liquidity.
