American Robotics job cuts loom as Ondas finalizes Airobotics acquisition and integration

Significant job losses are expected at leading autonomous drone inspection company American Robotics, as its Ondas Holdings owner prepares to integrate the activities of soon-to-be-acquired Israeli firm Airobotics.

Ondas said this week it expects to cut staffing at American Robotics as it ties up the final details in its purchase of Airobotics before the end of this month. An Ondas statement said the elimination of overlapping jobs involved in integrating the two companies would result in $18 million to $20 million in savings over operating them separately, and incur one-time costs of around $500,000 accounted against first quarter activity. 

Read: American Robotics owner Ondas finalizes Airobotics acquisition 

The announcement is not only a rare piece of bad news in a drone sector that has enjoyed robust business, income, and employment expansion in recent years. It also comes as a counterintuitive setback for American Robotics, which has been a groundbreaker in obtaining new Federal Aviation Administration approvals for beyond visual line of sight applications and scenarios of its docked, fully autonomous Scout platform.

Ondas, by contrast, says the job cuts are necessary to fully benefit from the advantages it expects from integrating American Robotics and Airobotics. Doing so, it said, will allow the company to “direct spending and investment to focus on near-term revenue generation and return on investment,” according to the statement.

“While the decision to reduce personnel at American Robotics was difficult, we believe it was necessary to shrink our operating costs and eliminate anticipated redundancies within the future combined operations,” it said. “On behalf of the executive team and board of directors, we thank all members of the American Robotics staff for their contributions in driving AR’s success to-date.”

Maker of the automated Optimus drone system, Airobotics agreed to Ondas’s acquisition offer of $15.2 million last year as the Israeli firm’s financial outlook darkened. Prior to going public in 2021, Airbotics estimated its value at $240 million, a figure that dropped to $130 million after its disappointing initial stock floatation. 

Read: American Robotics CEO Reese Mozer calls 2022 an ‘inflection point’ in automated drone services 

That downward pressure evidently continued into last August, when Ondas announced finalization of the deal to buy Airobotics and pair its activities with those of American Robotics, which it acquired in 2021 for just over $70.5 million. Instead of operating the two separately, however, many, if not all of their activities will be merged.

In a series of tweets about the move, Ondas CEO Eric Brock said staff reductions and other rationalization efforts in integrating Airobotics and American Robotics seek to provide a “a laser focus on revenue generation as we drive adoption across our technology platforms. Revenue is validation.” 

He did not offer any estimations on how many employees are expected to lose their jobs, but indicated the figure would not be insignificant.

“These plans included a substantial headcount reduction at AR,” he tweeted. “We are grateful for the significant contributions of our colleagues. We wish them the best and will provide any support we can as they find new opportunities.”