Israeli advanced driving assistance systems (ADAS) company Mobileye Global Inc. (Nasdaq: MBLY) has announced that it is closing down its aftermarket solutions unit due to market changes in recent years. The move will result in 130 employees being laid off, including an estimated 90 in Israel. At the end of 2023, Mobileye had 3,700 employees worldwide, up 200 from the end of 2022, so that closing down the aftermarket unit reflects a 3.5% cut in the workforce.
Mobileye said that after a thorough review of the aftermarket solutions unit's business prospects and investment needs it decided to wind down the unit, which provides retrofitted advanced driver assistance technology. The company said, "As automakers and other vehicle manufacturers have steadily increased the rate at which integrated ADAS solutions are installed on new vehicles, the demand and future addressable market for retrofitted ADAS solutions has declined. As a result, this division has seen its revenues decline meaningfully, to roughly $40 million on an annual basis, and in recent years has not positively contributed to Mobileye profitability."
Mobileye president and CEO Prof. Amnon Shashua said, "This was a very difficult decision. The IMS division, formerly known as Aftermarket, was an early driver of Mobileye’s leadership, demonstrating that road safety can be effectively delivered at a low cost, a key catalyst for increasing adoption of ADAS technologies on new vehicles. Unfortunately, the success of Mobileye’s built-in ADAS solutions has diminished the opportunities for retrofit solutions to the point where it is no longer viable to continue the retrofit solutions activity."
Focusing resources
Mobileye believes that the move will focus resources on opportunities for delivering more advanced forms of driver assist technologies and autonomous driving. The company said it will work to support about 130 employees affected by the shutdown worldwide. The move will take several months to complete and is not expected to have a material effect on the company's 2024 forecast.
Mobileye, controlled by Intel, is traded on Nasdaq with a market cap of $22.4 billion, up 32% from its IPO in December 2022.
Published by Globes, Israel business news - en.globes.co.il - on March 18, 2024.
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