Intuit, the tax preparation and financial software company, has announced a reorganization plan with a focus on artificial intelligence (AI). As part of this plan, the company will be laying off approximately 10% of its workforce, which amounts to 1,800 employees. However, Intuit expects to hire a similar number of employees in fiscal 2025 as it intensifies its efforts to integrate AI into its products and services.
CEO Sasan Goodarzi explained in an email to employees that over 1,000 of the layoffs were due to employees not meeting the company's heightened expectations. Additionally, 300 positions are being eliminated to streamline operations and redirect resources towards key growth areas.
Intuit, headquartered in Mountain View, California, will be closing offices in Boise, Idaho, and Edmonton, Alberta, Canada, affecting more than 250 employees. Some of these employees will have the opportunity to relocate to other locations within the company.
Goodarzi emphasized the importance of embracing the AI revolution, stating that companies that fail to leverage AI technologies will risk falling behind and eventually becoming obsolete.
Regarding severance packages, Intuit has assured that all laid-off U.S. employees will receive a minimum of 16 weeks' pay, with an additional two weeks for each year of service, along with at least six months of health insurance coverage. Employees were given a 60-day notice of termination, with the last day of employment set for September 9.
Intuit estimates that the reorganization plan will result in charges ranging from $250 million to $260 million, primarily in its fiscal fourth quarter ending on July 31. Following the announcement, Intuit's shares experienced a 3.6% decline in morning trading, reaching $626.29 per share.
