Innodata, a trendy AI stock that hit a $1 billion market cap in the past two years of AI euphoria, crashed by over 25% yesterday after it fired 550 employees.
The drastic cut spooked investors that the company might have lost its most important customer. Indeed, termination emails blamed the wind-down of a business assignment from a customer.
Investors sold down the market cap of INOD — common shares that trade on the Nasdaq despite the company’s substantial overseas presence — by $500 million within a single trading session.
By the close of trading yesterday, Innodata had erased all market cap gains its shareholders earned since November 11, 2024.
Innodata fired approximately 550 workers in India this week, and made additional layoffs in the Philippines. On Tuesday, shares in the data labeling supplier collapsed on seven times their average trading volume.
Yesterday was the stock’s worst performance since February 15, 2024 when a Wolfpack Research short-selling report preceded a single day crash of 30%.
The company is one of the AI industry’s small-cap winners. Indeed, as recently as 2020, it was a penny stock.
Today, the New Jersey-headquartered company labels data and safety tests for AI labs.
It last reported 10,107 employees as of December 31, 2025, and has reported a staggering 12 consecutive quarters of year-over-year revenue growth.
What started as an ordinary Monday for workers devolved into a purge. According to local reports, workers logged-in on October 26, layoff rumors spread by lunchtime, and office IDs were deactivated by the afternoon.
Source link
