In late 2007, Nuance laid off most of it's Israeli staff, leaving behind 30 to 40 employees. Nuance's R&D lab in Israel was made of people it had acquired through ART and Phonetic Systems in 2004.
ART provided mobile speech recognition (an area in which Nuance has made other acquisitions) and handwriting recognition (which has seeminly allowed to go fallow). Phonetic Systems had developed their own technology to provide Directory Assistance information. The closure of these operations is in line with Paul Ricci's dedication to running a relatively lean organization and his concerns about how current economic conditions are effecting the markets in which Nuance participates. He has noted that Enterprise Speech Rec partner revenue has been much lower than anticipated. In addition, the growth in mobile has slowed.