ShiftPixy files bankruptcy, cancels $150Mn TurboScale AI deal
FLORIDA, UNITED STATES — Florida-based staffing enterprise ShiftPixy Inc. has terminated its planned acquisition of AI technology company TurboScale, shortly after filing for Chapter 11 bankruptcy protection.
Leadership upheaval and bankruptcy filing
The company’s board determined ShiftPixy was “insolvent by every reasonably accepted metric” leading to its October 28 bankruptcy filing. This was followed by the removal of CEO Scott Absher and the resignation of both the board and CFO Patrice Launay.
Although the board of directors did not disclose the specific allegations against Absher, the decision was described in a U.S. Securities and Exchange Commission (SEC) filing as being “in the best interests of the company and its shareholders.”
Jonathan Feldman, a partner at Phang & Feldman law firm, has been appointed as chief restructuring officer to oversee operations.
Financial challenges and market impact
The canceled acquisition would have seen ShiftPixy acquire TurboScale for $150 million, structured as $75 million in stock and $75 million in debt. TurboScale provides GPU-accelerated infrastructure, enabling businesses to deploy and scale AI models effortlessly. Their platform offers cost-efficient, highly configurable virtual machines and private cloud solutions tailored to meet diverse enterprise needs.
The termination was disclosed in a filing with the U.S. SEC, where ShiftPixy stated it “will no longer be proceeding with this potential acquisition”. This development marks a significant setback for ShiftPixy’s plans to integrate advanced AI capabilities into its workforce management platform.
ShiftPixy, which operates primarily in the United States, designs and manages a platform that facilitates employment in the rapidly growing gig economy. The company focuses on the restaurant and hospitality industries, offering staffing and employment administrative services.
In the first nine months of its fiscal year ended May 31, ShiftPixy posted revenue of $11.7 million, marking a 52.42% decline from the previous year’s $36 million. The company has since been delisted from Nasdaq.
