Houston clean hydrogen startup Syzygy announces sweeping layoffs
Syzygy Plasmonics, a darling of the Houston startup community, said it would slash more than half of its staff by the end of March in what may be the first dramatic blow to the local clean tech industry connected to Trump administration policies aimed at focusing American energy development on fossil fuels, advanced nuclear, geothermal and hydropower.
The company, which has raised more than $100 million in funding and last year received backing from Japanese industrial giant Mitsubishi Heavy Industries America, has notified the state that it plans to layoff 68 employees beginning at the end of next month.
In a pair of Workforce Adjustment and Retraining Notification notices filed with the Texas Workforce Commission Feb. 5, the company said that beginning March 31 it plans to lay off 58 employees at its headquarters on South Sam Houston Parkway in Pearland and another 10 employees at its office on Kirby Drive in Houston.
The planned layoffs represent a reduction of more than half of the company's workforce of about 110 employees, CEO Trevor Best said in an interview Thursday evening.
"This is one of those read-the-room situations," Best said. "There's been a global slowdown in clean technology deployment. In general, the energy transition is not moving as quickly as everyone had anticipated a couple of years ago, when we were ramping up the company's operations. We're adjusting the company to match the market."
The Trump administration's energy policies, under the direction of Energy Secretary Chris Wright, former CEO of Colorado-based oilfield services company Liberty Energy, played a role.
"There is definitely a correlation between the new administration's stance on clean energy and the executive orders that have come out and customer mentality and investor mentality, so they are definitely tied together, he said."
Syzygy develops photoreactors that use light rather than combustion to power chemical reactions. The technology has the potential to change the way chemicals—including, crucially, hydrogen—are made and transported.
Since launching in 2018, the company has attracted international acclaim as well as more than $100 million in investment: $5.8 million in Series A funding in 2019; $23 million in Series B funding in 2021; $76 million in Series C funding in 2022.
Its technology raises the prospect that hydrogen, seen as a potential alternative to fossil fuels, can be produced and transported at a lower cost and with fewer emissions.
The layoffs, Best said in the WARN notice, are "a result of the company's current financial outlook." They are expected to be permanent.
Syzygy, which has roots in the Laboratory for Nanophotonics at Rice University, was co-founded by Best and Suman Khatiwada, now the company's CTO, along with Rice professors Naomi Halas and Peter Nordlander, who continue to serve as technology advisers. Best and Khatiwada met at oilfield services giant Baker Hughes, and left their jobs there in 2016 to pursue the venture.
The company finished as the top U.S. company, and third overall, at the Clean Energy Pitch Start-Up Battle in Scotland in 2021. Tjhe following year it was honored for the Energy Transition Technology of the Year at the Platts Global Energy Awards. In 2023, Syzygy announced a strategic partnership with Mitsubishi Heavy Industries America, the Houston-based subsidiary of the Japanese industrial giant. Last year, Syzygy was named one of Fast Company's Most Innovative Companies in energy.
Syzygy was announcing new developments as recently as last week. On Jan. 27 it said it had, in partnership with South Korea's Lotte Chemical, completed performance testing of an all-electric ammonia cracking system in South Korea.
"This is the breakthrough that Korea, Japan, and Eastern Europe have been waiting for," said Khatiwada in a statement. "They now have an efficient, proven way to crack imported ammonia for hydrogen."
Best noted that Syzygy has had "some really tremendous successes" recently, and that the company plans to retain its essential functions of reactor manufacturing, testing and R&D even as it enters a lean mode, at least for the time being.
"The market is changing," he said. "It's necessary for us to change the business accordingly."