Software company Intuit Inc. (INTU) has seen a decline in its shares following the announcement of a reorganization plan aimed at reallocating resources to focus on key growth areas. As part of this plan, Intuit will be laying off around 1,800 employees and closing its Boise and Edmonton sites.
The company intends to hire a similar number of employees by fiscal 2025 to support its growth initiatives, with an overall increase in headcount expected. The reorganization is expected to result in charges ranging between $250 million and $260 million, primarily in the fourth fiscal quarter ending on July 31, 2024.
These charges include severance payments, employee benefits, and non-cash charges related to share-based compensation and site closures. The company aims to complete these actions by the first fiscal quarter ending on October 31, 2024, subject to local laws and consultations.
Intuit, renowned for its QuickBooks accounting software, plans to boost investments in generative AI and expand into new markets like Canada, the United Kingdom, and Australia. Approximately 1,050 employees are leaving due to performance issues, with 80 technology roles being consolidated in locations such as Atlanta, Bengaluru, and Tel Aviv. Additionally, around 300 roles are being eliminated to streamline operations.
Despite the recent decline in share value, Intuit stock has shown a growth of over 34% in the last 12 months. Investors interested in the stock can access it through IShares Expanded Tech-Software Sector ETF (IGV) and Global X FinTech ETF (FINX). As of the latest update, INTU shares are trading lower by 4.15% at $623.45.
