California-based Intuit lays off 1800 employees, to prepare for 'AI revolution'

California-based Tax preparation and financial software company Intuit announced an AI-focused reorganization plan by laying off over 1000 employees.

Intuit, the California-based software company known for products like TurboTax, Credit Karma, and Mailchimpis laying off 1,800 employees, representing 10% of its workforce, in preparation for the "AI revolution."

Tax preparation and financial software company Intuit announced an AI-focused reorganization plan Wednesday, July 10, 2024, that includes laying off about 10% of its workforce. (AP)

According to SFGATE, nearly 600 of these layoffs will occur in California, with 384 employees affected in Mountain View and 215 in San Diego.

In a note to employees, Intuit CEO Sasan Goodarzi stated that the company is in a "position of strength" to capitalize on AI-driven innovation but needs to "accelerate our innovation and investments in the areas that are most important to our future success." As part of this strategy, the company made the "extremely painful decision" to lay off hundreds of staff members.

Goodarzi explained that 1,050 of the 1,800 employees being let go were not meeting performance expectations. The layoffs are not aimed at cost-cutting but at streamlining operations and reallocating resources to key growth areas. Additionally, more than 300 roles are being eliminated to "streamline work," and the number of executives is being reduced by approximately 10%.

However, Intuit plans to hire 1,800 new employees primarily in engineering, product, and customer-facing roles such as sales, customer success, and marketing. The company expects its overall headcount to grow in the fiscal year 2025 and beyond.

Laid-off employees will have their last day on September 9 and will receive a severance package that includes a minimum of 16 weeks of pay plus two additional weeks for every year of service to help them financially through the transition.

The tech sector has seen mass layoffs in recent years, with the pandemic causing a sudden downturn. In 2023 alone, over 260,000 people lost their jobs in the sector. Despite a significantly improved economic situation, layoffs have continued in 2024, with over 106,000 tech employees losing their jobs by June, according to Layoffs.fyi. Companies like Google, Amazon, Zoom, and Discord have all contributed to these numbers.