On Wednesday, Intuit, the global financial company that owns TurboTax, QuickBooks, MailChimp, and others, announced plans to lay off 1,800 employees while focusing on AI in streamlining operations, according to an open letter from the CEO.
Intuit Keeping Up with Generative AI
As AI drives global innovation at an unprecedented speed, transforming every industry and company in ways previously unimaginable, companies that fail to adapt may risk falling behind, the CEO's statement to employees reads.
The company, which has significantly invested in generative AI-powered tools in recent years, provides a note explaining the layoffs to reinvest in the essential strategic capabilities and skill sets needed to support Intuit's transformation, CBC reported.
Strategic Layoff Throughout Intuit
The leadership team has made challenging decisions to increase investment in key growth areas, laying off 10% of the workforce. Out of 1,800 employees leaving Intuit, approximately 1,050 employees are not meeting expectations, said CEO Sasan Goodarzi, adding that underperformers may find tremendous success outside of Intuit, Bloomberg reported.
Along with the layoffs, the company also plans to reduce its executive team by about 10% to improve decision-making efficiency, close its sites in Edmonton, Canada, and Boise, Idaho, resulting in the elimination of 300 roles to streamline operations and consolidate 80 technology positions to locations such as Atlanta, Bengaluru, and Tel Aviv as part of the layoff strategy.
The company aims to allocate additional investments to its most critical areas to support customers and drive growth. It involves reinvesting in the necessary skills and capabilities and rehiring 1,800 new employees in product, engineering, and other customer-facing roles.
According to a regulatory filing, Intuit anticipates the layoffs to incur around $260 million in costs, with most charges expected in the fourth quarter. Despite these changes, Goodarzi remains optimistic about Intuit's future growth, hoping to increase headcount in fiscal 2025 and beyond.
Intuit's Commitment to Impacted Employees
According to the memo, all affected employees who will have their last day on September 9, 2024, will receive a minimum of 16 weeks of pay, plus two additional weeks for each year of service, as well as six months of healthcare coverage and access to the Employee Assistance Program to support mental health during the transition.
Each affected employee will have access to career transition and job placement services, including resume help, interview techniques, and job search assistance. For those needing immigration support, the extended transition period will give visa holders extra time to find new roles, with access to external immigration experts for free advice and support.
With the strength of its people, culture, and mission, Intuit is well-positioned to leverage the AI revolution and transform customer experiences to deliver significant benefits in unprecedented ways. The memo concludes that the announcement marks a new beginning, with a focus on the future and the potential to drive prosperity worldwide.
