Tools for Humanity, Sam Altman's identity verification startup, is cutting staff as the company struggles to convert its biometric technology into revenue, sources tell TechCrunch. The layoffs arrive as OpenAI, where Altman serves as CEO, prepares for a public offering.
Tools for Humanity builds Worldcoin, a cryptocurrency and identity platform that uses iris-scanning technology to verify users. The company launched its token in 2023 and expanded to over 150 countries. But adoption has stalled. Regulatory scrutiny in Europe and ongoing data privacy concerns have limited the company's growth trajectory.
The startup faces a crowded identity verification market. Competitors like 1Password, Okta, and traditional players offer simpler solutions without the biometric complexity or regulatory friction that Worldcoin carries. The iris-scanning requirement creates friction for mass adoption, and several countries have blocked or restricted Worldcoin's operations due to privacy regulations.
Sources indicate Tools for Humanity failed to hit revenue targets and cannot sustain current burn rates. The company had raised over $250 million from backers including Khosla Ventures, Sequoia Capital, and Blockchain Capital. That capital cushion is depleting faster than expected as adoption lags.
Altman's involvement with multiple companies, including his CEO role at OpenAI and board seat at Worldcoin, may have contributed to the startup's challenges. OpenAI's IPO filing dominates his attention and industry focus. Tools for Humanity has operated more quietly, with less public momentum than rival identity platforms.
The layoffs signal that Altman's bet on iris-scanning as a path to universal identity verification has not materialized at the pace he envisioned. The company remains operational but will operate leaner. Industry observers question whether the biometric-first approach can overcome entrenched competition and