AI21 Labs, the Israeli artificial intelligence company founded by Amnon Shashua and Ori Goshen, announced Monday it is cutting more than 60% of its workforce — reducing headcount from approximately 180 to around 70 employees — in a dramatic strategic overhaul. The company will discontinue sales of standalone large language models (LLMs) and concentrate all resources on Maestro, its platform for optimizing and managing enterprise AI agents.
Why it matters
AI21 Labs has been one of Israel's most prominent AI startups, having raised hundreds of millions of dollars from leading investors, developed the Jamba model family, and operated as one of the few significant LLM players outside the U.S. The restructuring signals that the company is effectively exiting the foundation model race against OpenAI, Anthropic, and Google — in favor of a niche it sees as the next growth engine: AI agent orchestration and optimization.
According to the company, selling LLMs as standalone products has not generated sufficient revenue to justify continued investment in that direction.
What they're saying
In an official statement, AI21 said: "The rapid developments in AI required us to re-examine the company's operations from end to end. With great sadness we part with a group of excellent employees who made significant contributions to the company's key milestones. We are committed to supporting them through this period with sensitivity and responsibility. This move and our focus on AI agent optimization — a central challenge for organizations worldwide — will allow the company to accelerate its growth path."
Alongside the layoff announcement, AI21 confirmed it has signed multi-million dollar contracts with international customers to implement Maestro, including Nebius. The company also announced partnerships with several firms, notably Wix, to build on the Maestro platform.
Maestro is designed to solve a problem that has emerged over the past year as enterprises ramp up their AI agent deployments: how to manage and optimize growing fleets of AI agents — selecting between models, balancing cost against response speed, and improving reliability in production.
The restructuring follows the collapse of acquisition talks with Nebius, which had been in advanced negotiations to buy the startup. Instead of an acquisition, the two companies signed a commercial partnership.
The bottom line
AI21 is making a high-stakes bet: walking away from the core business that made it known — LLMs — and betting on a fast-growing niche in enterprise AI agent optimization. The success of this pivot will be determined by whether the company can convert its new international contracts and partnerships into sustainable growth. The deep workforce cuts, however painful, reflect an attempt to slim down quickly for the new trajectory.
