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Intuit targets low performers and executives in 10% jobs cut

Intuit products on display at a retail store in Brooklyn, NY, US, on Wednesday, Jan. 24, 2024 ahead of earnings call. Intuit (INTU) is expected to release earnings figures on February 21-23. Photographer: Eilon Paz / Bloomberg (Eilon Paz/Bloomberg)

(Bloomberg) -- Intuit Inc. is cutting 1,800 employees, swapping out low performers and executives with fresh hires meant to sharpen the company’s focus on products that use artificial intelligence.

Technology companies have shed a historic number of workers since early 2023, becoming quicker to shift priorities and part with employees. A slew of marquee names such as Microsoft Corp., Alphabet Inc.’s Google, Amazon.com Inc. and Salesforce Inc. have eliminated positions in 2024. Intuit, known for its TurboTax and QuickBooks software, had thus far avoided large-scale firings.

More than 1,000 of the employees being cut “are not meeting expectations,” Goodarzi said in the letter. The company is also reducing the number of executives by about 10 per cent to increase its “velocity of decision making.”

Technology companies have shed a historic number of workers since early 2023, becoming quicker to shift priorities and part with employees. A slew of marquee names such as Microsoft Corp., Alphabet Inc.’s Google, Amazon.com Inc. and Salesforce Inc. have eliminated positions in 2024. Intuit, known for its TurboTax and QuickBooks software, had thus far avoided large-scale firings.

“The changes we are making today enable us to allocate additional investments to our most critical areas to support our customers and drive growth,” Goodarzi said in the letter.

Shares of the software company fell three per cent at 10:07 a.m. in New York.

Goodarzi repeatedly emphasized Intuit’s focus on generative AI in his letter, and the importance of its core base of small- and medium-sized business customers. The company will also look to pick up more fintech talent for its Credit Karma business, which aggregates loans and helps users track cash flow.

The post-layoff hiring plans are “a sign that Intuit remains bullish on its growth prospects, especially as it relates to small business and Credit Karma,” wrote Kirk Materne, an analyst at Evercore ISI.

Company offices in Edmonton, Canada and Boise, Idaho will be closed, while some tech roles will be consolidated to larger hubs. Intuit will also accelerate its expansion in Canada, the U.K. and Australia, it said.

The firm will incur between US$250 million and $260 million in costs related to the job cuts, mostly from severance, it said in a filing with the U.S. Securities and Exchange Commission on Wednesday.

©2024 Bloomberg L.P.

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