California-based Intuit, known for TurboTax, Credit Karma, and Mailchimp, has embarked on an AI-focused reorganization. This significant move involves laying off 1,800 employees, about 10% of its workforce. The company aims to streamline operations and allocate resources to key growth areas, positioning itself for future success.
A Strategic Shift
On July 10, 2024, Intuit announced its AI-focused reorganization plan. This decision comes as part of the company’s strategy to capitalize on AI-driven innovation. CEO Sasan Goodarzi emphasized the company’s need to accelerate innovation and investments in crucial areas. Consequently, the company made the tough decision to lay off hundreds of staff members.
Impact on Employees
Intuit’s layoffs will affect nearly 600 employees in California. Specifically, 384 employees in Mountain View and 215 in San Diego will lose their jobs. The layoffs are not cost-cutting measures. Instead, they aim to streamline operations and enhance performance. Of the 1,800 employees being let go, 1,050 did not meet performance expectations. Additionally, over 300 roles are being eliminated to streamline work, and the number of executives is being reduced by approximately 10%.
Future Hiring Plans
Despite the layoffs, Intuit plans to hire 1,800 new employees. These new roles will primarily focus on engineering, product development, and customer-facing functions such as sales, customer success, and marketing. Intuit expects its overall headcount to grow in the fiscal year 2025 and beyond, reflecting the company’s long-term commitment to innovation and growth.
Support for Laid-Off Employees
Laid-off employees will have their last day on September 9. Intuit has committed to providing a severance package that includes a minimum of 16 weeks of pay, plus two additional weeks for every year of service. This package aims to support employees financially during their transition.
Broader Tech Sector Trends
The tech sector has experienced significant layoffs in recent years. The pandemic caused a sudden downturn, resulting in over 260,000 tech employees losing their jobs in 2023 alone. Despite an improved economic situation, layoffs have continued in 2024. By June, over 106,000 tech employees had lost their jobs, with companies like Google, Amazon, Zoom, and Discord contributing to these numbers.
Intuit’s Position of Strength
Intuit’s reorganization reflects its proactive approach to embracing AI and staying competitive in the evolving tech landscape. By streamlining operations and focusing on key growth areas, Intuit aims to drive future success and innovation. The company’s commitment to hiring new talent in critical areas underscores its dedication to long-term growth and development. Also Read: Tesla Delays Robotaxi Event to Build More Prototypes
Conclusion
Intuit’s AI-focused reorganization marks a significant step in the company’s strategic evolution. While the layoffs are a challenging aspect of this transition, the company’s future plans highlight a commitment to innovation and growth. As Intuit navigates this shift, it aims to position itself as a leader in AI-driven financial solutions, paving the way for future success.
Source: https://www.hindustantimes.com/
