The Layoffs in the tech sector are accelerating.
Global financial powerhouse Intuit, owner of TurboTax, QuickBooks, MailChimp, and other notable brands, announced on Wednesday a significant layoff affecting 1,800 employees, approximately 10 percent of its workforce. This move diverges from the typical tech industry trend of cost-cutting layoffs, instead focusing on performance-based departures.
In an official statement, Intuit emphasized that these layoffs are not a cost-cutting measure. The company, which has heavily invested in generative AI-powered tools in recent years, clarified its intentions. “We do not do layoffs to cut costs, and that remains true in this case,” a spokesperson stated, adding that the company is committed to “ongoing training and development programs” and aims to “reinvest in necessary strategic functional capabilities and skill sets to support Intuit’s transformation.”
#Technology Intuit to layoff 1,800 employees; hire with focus on AI: The financial software company sells a GenAI financial assistant called Intuit Assist, and will move further to build AI-native experiences for clients instead of the traditional… https://t.co/KS8jpDwl45 pic.twitter.com/BmbPgjN1x2
— Global Voters (@global_voters) July 11, 2024
Of the 1,800 employees being let go, approximately 1,050 are departing due to not meeting performance expectations. CEO Sasan Goodarzi highlighted that the company has raised its performance standards significantly, asserting that underperforming employees might find greater success outside of Intuit.
When questioned, the company did not disclose when the heightened performance expectations were implemented or how much time employees were given to improve before the layoffs were decided.
Intuit is laying off 1,800 employees as AI leads to a strategic shift.https://t.co/VI2Rulf6hx
— Samantha Banks (@BanksSaman28745) July 11, 2024
The layoffs are part of a broader strategy to reallocate resources and focus on other critical areas, particularly expanding its generative AI initiatives and accelerating international growth. As part of this shift, 300 roles will be completely eliminated to streamline operations.
This move appears to be a strategic reset for Intuit, allowing the company to pivot and strengthen its capabilities. Goodarzi announced plans to hire 1,800 new employees in marketing, engineering, and customer-facing roles, projecting growth for the company. The overall headcount is expected to increase in the fiscal year 2025 and beyond. The company also revealed plans to close sites in Edmonton, Canada, and Boise, Idaho.
Earlier this year, Intuit reported a rise in third-quarter revenue and increased its annual forecast, anticipating greater demand for its AI-generated products. The company’s AI tool, Intuit Assist, launched last year, offers personalized briefings, answers questions, drafts emails, and more for business owners. This tool benefits from the extensive pre-stored information from Intuit’s widely-used accounting and payroll products.
For U.S. employees affected by the layoffs, their last day will be September 9, 2024. Intuit detailed severance packages and support, including a minimum of 16 weeks of pay, plus an additional two weeks for each year of service. Laid-off employees will also receive six months of healthcare and access to career transition and job placement services.
Intuit is laying off 1,800 employees, approximately 10% of its workforce to focus on artificial intelligence (AI). pic.twitter.com/oqMNPbJKgr
— Uttkarsh Singh (@Uttupaaji) July 11, 2024
Key Points:
- Intuit is laying off 1,800 employees, about 10 percent of its workforce, primarily due to performance issues.
- The layoffs are not for cost-cutting but to reinvest in strategic capabilities and skill sets, particularly in AI and international growth.
- CEO Sasan Goodarzi announced plans to hire 1,800 new employees in marketing, engineering, and customer-facing roles, expecting overall headcount to grow in fiscal year 2025.
- Intuit’s recent AI tool, Intuit Assist, leverages the extensive pre-stored information from its accounting and payroll products, contributing to increased revenue forecasts.
- Affected U.S. employees will receive a comprehensive severance package, including 16 weeks of pay, additional weeks based on service, six months of healthcare, and job placement services.
TL Holcomb – Reprinted with permission of Whatfinger News
