Tools for Humanity Is Laying Off Staff as Its Eye-Scanning Identity Business Struggles to Find Revenue

The split-screen problem

Sam Altman is having two very different weeks depending on which of his companies you're watching.

At OpenAI, the mood is celebratory: the company has filed for an initial public offering, capping a period of rapid revenue growth and mainstream adoption. At Tools for Humanity — the startup behind the Worldcoin iris-scanning identity network — the picture is considerably darker. According to a TechCrunch report, the company is laying off staff after struggling to generate meaningful revenue.

The contrast is striking, but it isn't entirely surprising. The two companies are solving very different problems with very different commercial timelines.

What Tools for Humanity actually does

Tools for Humanity built Worldcoin, a project that asks users to scan their irises using a proprietary hardware device called the Orb. In exchange, they receive a World ID — a cryptographic credential (a tamper-resistant digital token) intended to prove that the holder is a unique human being, not a bot or a duplicate account.

The pitch has obvious appeal in an era of AI-generated synthetic identities. If you can't tell whether you're talking to a person or a language model, a biometrically verified proof-of-personhood could theoretically solve that problem at scale.

The harder question — one the company has never fully answered publicly — is who pays for that verification, and how much.

Revenue has been the persistent gap

Worldcoin launched its token and expanded its Orb rollout in 2023, accumulating millions of registered users across dozens of countries. User growth, however, is not the same as revenue. The company's business model has always been somewhat opaque: it has gestured at enterprise licensing, developer API access, and financial services integrations, but concrete commercial partnerships have been limited in public disclosures.

TechCrunch reports that the company is now downsizing as a direct consequence of those revenue difficulties. The report does not specify which teams are affected or the scale of the cuts, and Tools for Humanity has not publicly confirmed details. That uncertainty matters — a targeted reduction in one department reads differently than a broad restructuring.

Regulatory headwinds haven't helped

Tools for Humanity has also spent the past two years navigating regulatory friction that would slow any sales cycle. Authorities in Kenya, Germany, Brazil, and Hong Kong have at various points suspended or investigated Worldcoin's data collection operations, citing concerns about how biometric data — among the most sensitive categories of personal information — is stored and used.

Even where operations have continued, the regulatory cloud makes enterprise customers cautious. Signing a contract with a biometric identity provider that is under active investigation in multiple jurisdictions is a procurement risk most compliance teams would rather avoid.

What this means for the proof-of-personhood space

Tools for Humanity's difficulties don't necessarily invalidate the underlying idea. Proof-of-personhood — verifying that a digital actor is a unique human — is a genuinely hard problem that is becoming more commercially relevant as AI-generated content and synthetic identities proliferate. Other approaches, including non-biometric methods, are being explored by competitors.

But Worldcoin made a specific bet: that iris scanning at global scale, via proprietary hardware, was the right architecture. That bet required both regulatory tolerance and a clear enterprise revenue path. So far, neither has fully materialized.

Whether the layoffs represent a painful but survivable reset or something more terminal isn't clear from available reporting. What is clear is that the gap between what the company promised and what it has delivered commercially is now large enough to cost people their jobs.