One Altman Company Files for IPO, Another Cuts Staff — Leaked Memo Reveals Layoffs at $2.5 Billion Orb Startup

Two companies under the wing of American entrepreneur Sam Altman appear to be headed in different directions. On one end, OpenAI has reportedly completed the necessary paperwork and filed it with the US Securities and Exchange Commission. This means that OpenAI would be among a growing list of artificial intelligence companies set to debut on Wall Street.

Ironically, on the same day as the OpenAI IPO filing, a leaked memo revealed that another Altman company, Tools for Humanity, was laying off workers. The $2.5 billion orb startup is reportedly struggling to generate revenue, and the unpopular recourse being taken is laying off some of its workforce.

'As we enter the next step of our company strategy and operating priorities, we have made the hard decision to make changes to some roles and teams across the company,' a portion of the leaked document allegedly sent to employees on Monday, 8 June, read.

Tools for Humanity employs more than 500 workers. As of this writing, there is no official word on how many of that workforce will be left jobless. The management team behind the orb startup has yet to respond to the leaked memo. However, clarity on the direction in which Tools for Humanity is headed will be known at a town hall meeting scheduled for Tuesday, 9 June, per a report by Business Insider.

Technology That Made Sense

For those who may be unaware of what Tools for Humanity does, it is a verification project aimed at providing better authenticity through the use of a silver orb. It uses iris-scanning technology to scan an individual's eyes. This helps authenticate users in many ways, including properly distinguishing bot activity from actions actually performed by a human.

Additionally, the eyeball-scanning solution supports the company's authentication procedures. The scans help validate the identities of people engaging in transactions involving its cryptocurrency operations, known as Worldcoin.

The advanced technology impressed several groups, which subsequently infused capital into the company. Among the groups who invested were Andreessen Horowitz and Bain Capital, leading to Tools for Humanity securing a $2.5 billion valuation.

In an effort to start proving its worth, Tools for Humanity offered a promotional incentive known as the Worldcoin Genesis Grant. Under this scheme, users would receive $50 worth of Worldcoin (WLD) by downloading the World App and having their iris scanned by a biometric imaging device called an Orb, according to CoinGecko.

Privacy Concerns Derail Outlook

Given the advanced technology, it was hardly surprising that the Tools for Humanity service attracted significant attention. However, concerns were eventually raised, particularly when it came to individual privacy and potential conflicts with regulatory laws enforced by different countries.

These were the reasons why several countries ended up either restricting or penalising Tools for Humanity. Governments raised financial and privacy concerns, a development that gravely affected the potential income the company was anticipating.

Among the countries that have banned or restricted the iris-scanning technology are Kenya and India. The service was also suspended in Hong Kong in 2024 amid concerns that iris scans could lead to people's personal information being compromised, the South China Morning Post reported.

In South Korea, Tools for Humanity was fined $830,000 for violating local privacy laws. According to the PIPC, the Worldcoin Foundation did not properly notify subjects of the purpose of collection and the duration of retention of their scanned iris data.

Altman finds himself caught in the middle of good and bad news. The OpenAI IPO filing is a milestone, but the shake-up at Tools for Humanity threatens to overshadow that accomplishment.