E-commerce shifts to AI: Yotpo lays off about 200 employees | CTech

Israeli-founded unicorn Yotpo is laying off approximately 200 employees, representing around 34% of its global workforce, as part of a major strategic overhaul, Calcalist has learned. The layoffs affect about 80 employees in Israel, with the remainder spread across offices in Bulgaria, Poland, London, New York, and Australia.

As part of this restructuring, Yotpo is shutting down its Email and SMS marketing operations, selling the customer base to U.S. marketing platform Attentive in a deal estimated to be worth tens of millions of dollars. Instead, Yotpo will integrate Attentive’s offerings into its platform while refocusing on its core products: Reviews and Loyalty.

The company describes the move as part of its transformation into a "profitable, product-first company" with a clear AI-first approach.

“Today, we have a very clear strategy: a deep focus on our core products - Reviews and Loyalty - and on AI, technology, infrastructure, and every internal process,” said Tomer Tagrin, Yotpo co-founder and CEO. “In the coming months, Yotpo will stop offering its Email and SMS products. Instead, we are partnering with the leading platforms in the field and investing all our resources in building best-in-class Reviews and Loyalty solutions.”

Tagrin acknowledged the personal toll of the layoffs, calling it "a painful but necessary process."

“I truly believe that tomorrow’s companies will be smaller, more focused, and much more AI-based,” he said. “And we must put ourselves in this reality, not just talk about it, but act accordingly… This is a painful but necessary step and I want to say a deep and personal thank you to each and every one of you. You are part of Yotpo’s DNA - and always will be.”

Yotpo says the strategic pivot is already yielding innovation. The company has launched a wave of AI-powered products, including: Automated review summaries that improve conversion rates; Smart sorting tools and support for translations in over 50 languages;A review analytics engine called Reviews Atlas; Beta launch of a new Loyalty Tiers system; and full adaptation of customer reviews for use in large language models (LLMs).

Internally, Yotpo has already adopted AI at scale: 70% of basic support requests are handled via AI tools; 90% of marketing campaigns over the past year were built using AI; The company estimates 40% of new code will be written using generative AI by 2026;Finance, sales, and customer service workflows are being rebuilt with an AI-first mindset.

Yotpo currently serves more than 25,000 global brands, including Steve Madden, IKEA, Patagonia, GoPro, and others. Despite the layoffs, the company continues to employ hundreds of staff in Israel, the U.S., and other markets.

Founded by Tomer Tagrin and Omri Cohen, Yotpo has raised a total of $406 million to date. Its most recent round in March 2021 raised $230 million at a $1.4 billion valuation. Previous investors include Tiger Global, Bessemer Venture Partners, Shopify, Vertex, Vintage, Rhodium, and others.