Tax preparation and financial software company Intuit has unveiled a reorganization plan aimed at integrating artificial intelligence (AI) into its products and services. As part of the plan, the company announced it will lay off approximately 10% of its workforce, which amounts to 1,800 employees. However, Intuit expects to hire a similar number of employees by fiscal year 2025 as it focuses on accelerating its AI initiatives.

In an email sent to employees, Intuit CEO Sasan Goodarzi explained that over 1,000 of the layoffs were due to employees not meeting the company's heightened expectations. Another 300 positions are being eliminated to streamline operations and allocate resources towards key areas of growth. Additionally, the company will be closing offices in Boise, Idaho, and Edmonton, Alberta, affecting more than 250 employees. Some of these employees may have the opportunity to relocate to other locations.

Emphasizing the significance of the AI revolution, Goodarzi stated, "The era of AI is one of the most significant technology shifts of our lifetime. Companies that aren't prepared to take advantage of this AI revolution will fall behind and, over time, will no longer exist."

Regarding severance packages, Intuit confirmed that all laid-off U.S. employees will receive a minimum of 16 weeks' pay. Additionally, they will be entitled to an additional two weeks of pay for every year of service and a minimum of six months of health insurance coverage. The affected employees were given a 60-day notice of termination, with their last day scheduled for September 9.

Intuit estimates that the reorganization plan will result in charges ranging between $250 million and $260 million, with the majority of these expenses expected to be incurred in the company's fourth fiscal quarter, which ends on July 31.

Following the announcement, Intuit's shares experienced a decline of 3.6% in morning trading, reaching $626.29 per share.

This move by Intuit reflects the company's commitment to leveraging AI technology to enhance its financial software products and services. With the global proliferation of AI, companies across various industries are increasingly embracing this transformative technology to stay ahead of the competition and adapt to changing market dynamics.