US financial and tax software giant Intuit will cut 1,800 employees and replace underperforming executives with new ones to strengthen the company's focus on products using artificial intelligence.
Smart Finance App learned that US financial and tax software giant Intuit (INTU.US) will cut 1,800 jobs and replace underperforming executives with new hires to focus more on products using AI.
In a letter to employees on Wednesday, CEO Sasan Goodarzi said about 10% of the global workforce will be affected. He added that the move was not just to cut costs; the company hopes to rehire the same number of employees, mainly in engineering, product and sales departments.
Goodarzi said in the letter that more than 1,000 employees who were laid off "did not meet expectations." The company will also reduce the number of executives by about 10% to increase "decision-making speed."
Since early 2023, tech companies have laid off record numbers of employees to shift focus and cut jobs faster. A long list of top companies, including Microsoft (MSFT.US), Google (GOOGL.US), Amazon (AMZN.US), and Salesforce (CRM.US), have reduced their staff in 2024. Intuit, known for its TurboTax and Quickbooks software, has so far avoided large-scale layoffs.
"The changes we're making today allow us to allocate additional investments in our most critical areas to support our customers and drive growth," Goodarzi said in the letter.
Goodarzi emphasized Intuit's focus on generative AI in the letter, as well as the importance of its core customer group of small businesses. The company will also look for more fintech talent for its Credit Karma business, which consolidates loans and helps users track cash flow.
Evercore ISI analyst Kirk Materne wrote that the recruitment plan after layoffs "indicated that Intuit remains bullish on its growth prospects, especially in small business and Credit Karma-related businesses."
The company's offices in Edmonton, Canada, and Boise, Idaho, will be closed, while some technical positions will be merged into larger centers. Intuit will also accelerate expansion in Canada, the UK, and Australia.
In a filing with the US Securities and Exchange Commission on Wednesday, the company said that costs related to layoffs would be between $250 million and $260 million, most of which would be severance pay.