With a vision to reinvent and adapt under fast-emerging artificial intelligence, Intuit, the giant of financial software behind TurboTax and QuickBooks, announced the sweeping reorganization plan, involving laying off around 1,800 employees, about 10% of its global workforce.
“The era of AI is one of the most significant technology shifts of our lifetime,” Intuit CEO Sasan Goodarzi wrote in an email to staff. Those firms that don’t adapt to this revolution are destined to fall behind, likely to go out of business perhaps over time.
The layoffs include more than 1,000 employees who were underperforming to new expectations the company had set, and they are part of broader plans for trimming the company to refocus resources on fast-growing businesses. Three hundred other positions will be eliminated to help accomplish that goal.
Intuit’s reorganization plan includes shutting down offices in Boise, Idaho, and Edmonton, Alberta, changes that will affect more than 250 workers. The firm has said that it would transfer some of the employees to new locations.
Despite the layoffs, Intuit is likely to hire at least as many employees during the fiscal year 2025 as it continues to accelerate its focus on bringing AI into its products and services, seeking to truly make traditional workflows natively AI experiences. However, that number has not been spelled out.
The layoffs are happening at a time when Intuit is increasingly competing with free government services, including Direct File. It was a pilot service that allowed millions of American taxpayers to file taxes for free without using commercial providers like TurboTax. This composes a huge threat to the key business at Intuit, which over the years has lobbied on the provision of free online tax filing services.
On severance benefits, Intuit provided at least 16 weeks of pay and two more for each year of service to all U.S. employees who had been laid off; also, it gave at least six months of health insurance coverage. Staff was given 60 days’ notice, with a final termination date of September 9.
Intuit said it would take charges of $250 million to $260 million for the reorganization plan, mostly, again, in its fiscal fourth quarter ending July 31, according to a regulatory filing. Intuit shares were last down 3.6% at $626.29 in morning trading.
Recorded restructuring on this scale puts Intuit among other tech companies wrestling with what AI means for business models going forward.