Lightricks Splits Facetune From AI Video Business as Cuts Deepen
Lightricks is separating its profitable consumer app business from its costly generative video division, cutting 75 more jobs in the process. The Jerusalem software maker behind Facetune is acknowledging what investors and employees increasingly understand: one company cannot efficiently manage two fundamentally different businesses.
The latest layoffs affect 17% of Lightricks' workforce, including 55 workers in Israel. Combined with an earlier cut of 85 employees less than six months ago, the company will shrink to roughly 350 people-about half its 2022 size.
The Math No Longer Works
Facetune generates roughly $300 million in annual revenue and grows at about 20% a year. It is a proven consumer software business with paying subscribers and predictable costs.
LTX, the generative video platform, operates in a different universe. Generative video is one of the most expensive software categories to build. Every serious competitor-OpenAI's Sora, Runway, Google Veo, and others-needs custom models, expensive compute infrastructure, research teams, and distribution channels. That combination strains a mid-sized company's resources.
Lightricks invested roughly $150 million into LTX. The business now generates annualized revenue in the tens of millions from model licensing deals with large technology companies and Fortune 500 clients, but the math still does not work when one division must subsidize the other.
Two Different Mandates
Under the restructuring, co-founder Zeev Farbman will lead LTX, while Asaf Porat-formerly deputy CEO of Outbrain-will run Facetune. The leadership split is deliberate.
Facetune can now be managed for cash generation and durability. LTX can chase enterprise adoption, model performance, and future fundraising without being pulled back by the need to maximize consumer app profits.
Farbman told local media that Lightricks still has about 30 open roles, but they require different talent. The company is hiring people who have built AI models before. That reflects a harder truth in AI restructurings: companies are not simply shrinking. They are replacing one set of skills with another, often while asking the remaining business to fund the transition.
LTX Bets on Licensing, Not Direct Service
LTX started as a creative platform for AI video production but is shifting toward licensing models to enterprise customers. Running video models directly for users burns cash quickly as usage scales faster than revenue.
Licensing the technology to customers who run models on their own infrastructure reduces Lightricks' compute costs and moves the business toward enterprise software economics. It is less visible than consumer AI tools but easier to defend when customers embed models into actual workflows.
Lightricks is also exploring physical AI applications-using video models to help train robots to understand human actions like folding laundry. That market remains speculative, but it explains why the company does not want LTX judged solely as another creator app.
The Competitive Pressure
LTX faces stiff competition. Open-weight video models keep improving, and well-funded AI labs can spend heavily on research and infrastructure. Lightricks has released some LTX models openly to build developer interest, but that approach cuts both ways: it generates interest while also making a lasting product advantage harder to maintain.
The split signals that Lightricks is choosing focus because the market demands it. If Facetune continues generating cash and LTX proves that AI video can work as a licensing business rather than a compute sink, both divisions gain better odds. If not, the restructuring will serve as a cautionary tale for other creative AI startups: growth alone no longer suffices when staying competitive keeps getting more expensive.
For creatives using these tools, the split means clearer product roadmaps. Facetune will focus on what it does well-consumer editing features. LTX will pursue enterprise and robotics applications rather than trying to compete as a general-purpose creative platform.
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