gut instinct Nasdaq Inc. (NASDAQ:NASDAQ) plans to lay off about 1,800 employees worldwide, or 10% of its workforce, according to a news release Wednesday. The move is not intended to cut costs, according to the announcement.
The company’s shares fell 1.8% before the market opened.
CEO Sasan Goodarzi said the decision is part of Intuit’s strategic shift, focusing on AI and generative AI. The company aims to enhance its AI-powered financial assistant, Intuit Assist, and transform its products into AI-powered experiences. Other strategic priorities include moving money, expanding into the small business mid-market, and growing internationally.
“We are not laying off workers to cut costs, and that is true in this case,” Goodarzi reportedly wrote.
The business software company plans to hire about 1,800 new employees with specific skill sets in engineering, product and customer-facing roles such as sales, customer success and marketing. The company expects its total headcount to grow in fiscal 2025, starting August 1.
Of the 1,800 employees who leave the company, 1,050 are not performing as required, according to the formal performance management process.
“These employees will be more successful outside of Intuit,” Goodarzi said. In addition, the company is reducing its executive team by about 10%, including directors, senior vice presidents and executive vice presidents, while expanding some executive roles and responsibilities.
Intuit is also consolidating 80 technical roles in growing tech hubs in Atlanta, Bangalore, New York, Tel Aviv and Toronto.
The company will close two locations in Edmonton and Boise, impacting more than 250 employees, with some moving to other locations within Intuit or leaving the company. Intuit is also eliminating more than 300 jobs across the organization “to streamline the business and reallocate resources toward key growth areas,” according to the statement.
According to reports, employees leaving the US will receive a severance package that includes at least 16 weeks of pay, plus an additional two weeks for each year of service. They will have 60 days before their last day on September 9. Employees outside the US will receive similar support, adjusted according to local requirements.
The company expects to incur charges of between $250 million and $260 million for its plan in the fourth quarter of fiscal 2024, which ends July 31. That includes $217 million to $227 million in severance and employee benefits and $33 million in non-cash charges for stock-based compensation and site closures.