C3 AI shares plummet as company cuts 26% of workforce, posts wider loss than expected

C3 AI has experienced a significant downturn, with shares plunging 17% to reach an all-time low after the company disclosed its disappointing fiscal third-quarter results. The enterprise artificial intelligence firm reported revenues of $53 million, falling short of LSEG estimates that predicted $76 million. Additionally, C3 AI recorded a loss of 40 cents per share, surpassing analyst expectations of a 29-cent loss. CEO Stephen Ehikian addressed these challenges during the earnings call, emphasizing the growing importance of AI for CEOs aiming to achieve tangible economic benefits. Yet, he acknowledged that the company's cost structure was unsustainable and that a reorganization was necessary. In a strategic move to enhance operational efficiency, C3 AI announced it would reduce its global workforce by 26%. This restructuring plan, spearheaded by Ehikian, also includes a 30% cut in non-employee expenses. Ehikian took the helm in September after former CEO Thomas Siebel resigned due to health issues. Looking ahead, C3 AI projects fourth-quarter revenues to fall between $48 million and $52 million, significantly below the LSEG forecast of $78 million. The anticipated operational losses for the fourth quarter are estimated to be between $56 million and $64 million, again exceeding LSEG's predictions of a $48 million loss. In response to these developments, Citizens has downgraded C3 AI from a market outperform to a market perform status, with analyst Patrick Walravens indicating that the firm is adopting a more cautious stance due to immediate business hurdles and growing competition. C3 AI, which went public in December 2020 with an initial share price of $100, has seen a dramatic decline, with shares currently trading around $10.