American identity and access management company Okta has announced plans to lay off approximately 400 employees, which is about 7% of its global headcount.
The layoff is coming a year after the company announced plans to downsize its workforce by 5%, which is about 300 employees.
In an email sent to employees Chief Executive Officer (CEO) of Okta, Todd McKinnon said the decision was necessary for the company to grow profitably, adding that costs are still too high. He further added that the firm needed to be more thoughtful about where it was investing in order to achieve long-term success.
Part of his message reads,
“After a thoughtful FY25 business planning process, the leadership team and I have made the difficult decision to implement a workforce reduction impacting about 7% of our company, or approximately 400 people. In order to grow profitably, we need to run the business with greater efficiency. While we’ve taken steps in the right direction, the reality is that costs are still too high.
“We need to be mindful of our overall spend so we can continue to invest in the areas, products, and routes to market with the most opportunity. To capture our massive potential and build an iconic company, we must be thoughtful about where we place our bets. This action is a proactive measure to help set the company up for long-term success”.
The company has promised to support all affected employees during this transition to provide them with all resources to help them through this period. Impacted employees in the U.S. will receive transition support that includes additional time on payroll, the March RSU vest, cash severance, extended healthcare coverage, job placement resources, and support for anyone on a company-sponsored visa.
Following the recent downsizing of its workforce, Okta disclosed that it expects to record an insignificant adjustment to its stock-based compensation expense in the first quarter of fiscal 2025 related to equity compensation for employees who are terminated.
Recall that last year October, after Okta announced its Third Quarter Q3 revenue which grew 21% year-over-year, the company forecasted for the full year fiscal 2024, total revenue of $2.243 billion to $2.245 billion, representing a growth rate of 21% year-over-year
Non-GAAP operating income of $283 million to $285 million, which yields a non-GAAP operating margin of 13% and Non-GAAP diluted net income per share of $1.47 to $1.48.
The San Francisco-based company joins the likes of other tech companies such as Google, Amazon, and PayPal, amongst others, that have announced layoffs since the start of the year. Reports reveal that nearly 24,000 tech workers lost their jobs in January alone, even as many tech companies saw their stock prices continue to grow.
Zoom Cut About 150 Jobs, Announces Plans to Hire in Critical Areas For Year 2024
Video conferencing app Zoom has announced the latest job cuts of 150 employees, as it plans to hire in critical key areas for the year 2024.
Bloomberg reports that the number of employees leaving the company is less than 2% of its workforce.
The report further states that the job cuts aren’t across the entire company, as Zoom plans to hire in 2024, particularly in areas like Artificial Intelligence, Sales, and Engineering.
Speaking on the recent job cuts, a spokesperson at the company said,
“We regularly evaluate our teams to ensure alignment with our strategy. As part of this effort, we are rescoping roles to add capabilities and continue to hire in critical areas for the future”.
Recall that Zoom exploded in popularity at the start of the COVID-19 pandemic as workers turned to the video-conferencing platform to stay in touch with colleagues, friends, and family. This forced the platform to increase recruitment of workers during the pandemic to keep up with the high demand. But as the pandemic subsided and many workers returned to the office, Zoom stock stumbled.
Post-lockdown, the company’s shares fell about 90% as the company’s investors struggled to adapt to a post-COVID world. Furthermore, Zoom’s stock dropped 10%, after the company slashed its annual sales forecast and reported its slowest quarterly growth.
Last Year February, Zoom cut around 1,300 workers, or about 15% of its workforce, as the company braced for the uncertainty of the global economy.
To deal with the tumbling revenue growth, the company has been making strategies to reinvest in new businesses. Also, it has been spending more on product development and marketing activities to develop products like the cloud-calling service Zoom phone and conference-hosting offering Zoom rooms.
This year 2024, a new wave of job cuts has hit several tech companies, which has seen companies such as Amazon, Microsoft, and Salesforce have announced workforce reductions.
Last month, Microsoft cut1,900 positions in its gaming division, Google announced the elimination of hundreds roles across the company; and Amazon laid off employees across its Prime Video, MGM Studios, Twitch and Audible divisions.
According to layoffs.fyi, more than 100 tech companies have laid off about 30,000 employees since the start of the year.
One explanation for the January surge as companies budget for the year ahead, is that they have learned that they can do more with less. Also, the AI hype has raised concerns in many corners of the economy about the declining need for human labor as technology gets smarter.
It is already having a significant impact on the workforce, as AI demand has intensified, that some tech companies are cutting headcount in parts of the business to invest more heavily in developing AI product.
Okta is the latest tech company to register layoffs, letting go of roughly 400 employees globally, or 7% of its staff, the company said on Thursday. In an email sent to employees, CEO Todd McKinnon said costs were “still too high.” The layoffs at the San Francisco-based identity management giant come just a year after it cut about 300 jobs due to “overhiring.” It comes as big firms including Amazon and Google have announced rounds of job reductions this year, continuing to reverse some of their pandemic hiring sprees.
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Videoconferencing company Zoom cut roughly 150 jobs this week, or less than 2% of its workforce as they evaluate teams “to ensure alignment” with their strategy, Bloomberg reports, citing anonymous sources. (LinkedIn News)
