Intuit to cut about 1,800 jobs as it looks to increase AI investments
Adds shares and analyst comment in paragraphs 4-5
By Akash Sriram
July 10 (Reuters) -TurboTax-parent Intuit INTU.O said on Wednesday it will let go of about 1,800 employees, or 10% of its workforce, as it looks to focus on its AI-powered tax preparation software and other financial products.
The company, which has invested heavily in providing generative AI powered accounting and tax preparation tools for small and medium businesses in the past few years, expects to close two of its sites in Edmonton, Canada and Boise, Idaho.
Intuit will rehire 1,800 new people primarily in engineering, product and customer-facing roles, CEO Sasan Goodarzi said in a note to employees.
The company, whose shares fell 3.6%, did not provide a timeline for the fresh hiring.
"We believe making these changes from a position of strength is the right move and we view the incremental hiring plans post reduction in workforce as a sign that Intuit remains bullish on its growth prospects, especially as it relates to small businesses and Credit Karma," Evercore ISI analyst Kirk Materne said.
Intuit, which also makes online accounting software QuickBooks, said it will increase investments in generative AI and plans to expand into new markets including Canada, United Kingdom and Australia.
The note added that 300 roles were being eliminated to streamline work, while consolidating 80 technology roles to sites such as Atlanta, Bengaluru, Tel Aviv and others as part of the layoff plan.
The layoffs will cost Intuit between $250 million and $260 million, with substantial amounts of the charge expected to be incurred in the fourth quarter, the company said in a regulatory filing.
Intuit expects to grow headcount in fiscal 2025 and beyond, Goodarzi said.
In May, Intuit reported a rise in third-quarter revenue and increased it annual forecasts expecting a boost in demand for its AI-integrated products.
Reporting by Akash Sriram in Bengaluru; Editing by Shounak Dasgupta
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