Intuit to Lay Off 1,800 Employees as Part of AI-Focused Reorganization Plan

Washington, D.C. - Tax preparation and financial software company Intuit has announced a significant reorganization plan, focusing on incorporating artificial intelligence (AI) into its products and services. As part of this plan, the company will be laying off around 10% of its workforce, amounting to 1,800 employees.

CEO Sasan Goodarzi revealed in an email to employees that over 1,000 of the layoffs were due to employees not meeting the company's elevated expectations. An additional 300 positions will be eliminated to streamline work and reallocate resources towards key growth areas.

Intuit, known for its popular products QuickBooks and TurboTax, aims to position itself at the forefront of the AI revolution. In the email to staff, Goodarzi emphasized the importance of embracing AI and stated that companies failing to do so will eventually cease to exist.

The reorganization plan also includes the closure of offices in Boise, Idaho, and Edmonton in Alberta, Canada, where more than 250 employees are currently based. Some of those affected will have the opportunity to transfer to new locations within the company.

Regarding severance, Intuit has assured its laid-off U.S. employees that they will receive a minimum of 16 weeks of pay. In addition, they will receive two additional weeks of pay for every year of service and a minimum of six months of health insurance coverage. Employees were given a notice period of 60 days, with their last day of work being September 9th.

The company estimates that the reorganization plan will result in charges between $250 million and $260 million, mostly occurring in the company's fiscal fourth quarter, ending on July 31st.

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

Intuit remains optimistic about its future prospects as it looks to harness the potential of AI technology to enhance its products and services. The company expects to rehire a similar number of employees by fiscal 2025, reflecting its commitment to embracing AI and driving innovation in the industry.