In a press release on Tuesday, DocuSign announced a restructuring plan to reduce its workforce by 6% to enhance the company's financial and operational efficiency and support its multi-year growth goals as an independent public company.
DocuSign Restructuring Plan
DocuSign has 7,336 employees, and the online signature provider stated that 440 jobs would be affected by the cuts, mostly affecting employees from its sales and marketing departments, according to its latest filing with the U.S. Securities and Exchange Commission.
DocuSign's shares fell over 1% on Tuesday.
According to the release, the company expects to face around $28 to $32 million in one-time restructuring charges for the restructuring plan, mainly covering cash expenditures for employee transitions, notice periods and severance payments, benefits, and non-cash expenses related to vested share-based awards.
Timeline of the Restructuring Plan
DocuSign said that the restructuring plan will primarily be finished by the end of its second fiscal quarter of 2025. The company also mentioned it anticipates meeting or surpassing the guidance it provided for the fourth quarter and fiscal year 2024 that it outlined in a December release. Additional information about the restructuring is said to be provided when it releases its fourth-quarter results.
It's uncertain if the restructuring has affected Canadian employees at DocuSign. According to the company's LinkedIn page, the company has over 140 workers in Canada.
It's one of the latest big tech companies to announce layoffs this year, following Snap, Okta, PayPal, Block, Zoom, Salesforce, eBay, and Google.
Stalled DocuSign Deal Due to Price Disagreements
DocuSign's shares rose sharply in January amid reports of competition between Bain Capital and Hellman & Friedman to acquire the online signature provider. The said companies have backed off from pursuing DocuSign Inc. due to acquisition price disagreements, according to three sources familiar with the situation reported by Reuters.
After a week of talks, the sources said that the private equity firms have not been able to agree on a deal price with the company valued at $11 billion. The deal talks may resume, according to the sources who requested anonymity due to confidentiality.
Bain and DocuSign didn't respond to requests for comment, while Hellman & Friedman declined to comment. The potential deal for DocuSign would have been among the largest leveraged buyouts in the past two years, but rising financing costs have made bigger deals more challenging to complete.
DocuSign Valuation
DocuSign went public with a $6 billion valuation in 2018. The online signature provider lets customers electronically sign documents from any device and serves large corporations like T-Mobile, United Airlines, and Thermo Fisher.
DocuSign's quarterly earnings were 79 cents per share for the quarter ending in October, up from 57 cents over a year ago, and its revenue increased by 8.5% to $700.4 million.
