Intuit axes 3,000 – without blaming AI

SaaS

‘Margin expansion’ and a ‘faster, leaner’ company are CEO Sasan Goodarzi’s goals 

Intuit has cut its full time workforce by 17 percent and is considering closing offices in some markets “to become “faster, leaner, and more focused,” company CEO Sasan Goodarzi told investors during a Wednesday earnings call. 

“This was not about AI,” Goodarzi said, before explaining that over the last year company management has studied the question “beyond the tools that we are putting in place across the company, what is actually the biggest blocker and what is getting in our way?”

One of the answers was that Intuit had too many layers of management. Goodarzi  said doing so will “reduce the complexity of information flow of … so we can push decision making to our frontline folks that are the builders.” 

The CEO said Intuit also decided to cut in what he described as “coordination-heavy” roles such as project managers and business operations jobs that have become less necessary due to the speed at which the remaining teams can build products. He said Intuit also merged TurboTax and Credit Karma as a business unit so some of the cuts resulted from overlaps within that group. 

The move to fire over 3,000 employees comes as the company said it spent $3.4 billion in stock repurchases during the previous nine months ended April 30. Intuit’s board of directors also mandated the company lean in to share buybacks as it authorized an additional $8 billion to be spent on Intuit stock at the discretion of management and the board. 

The job cuts are expected to cost the company about $340 million in restructuring charges, with much of that coming in the form of severance payments, according to SEC filings Intuit published Wednesday afternoon. 

“A big chunk of this, you can count on it to go to margin expansion and EPS growth, and a smaller part is going to be scaling the growth engines because we feel good that the growth engines are funded quite well, just because of the productivity we see internally,” Goodarzi told investors.

Several victims of the cuts posted their story to LinkedIn and many of them were, as Goodarzi said, in product, or project management positions. 

“I would like to thank all my teammates, both past and present, who have made the job such a fulfilling experience. I’d like to thank each and every one of the managers who have helped guide me along my path from entry-level technical support to Staff Engineer,” wrote one employee who said he had been with the company for 13 years. 

The cuts also included a senior sales and productivity analyst who has been with Intuit for 25 years, a software engineer with nine years at the company, and an engineering team leader with two years in that role, according to LinkedIn posts. 

In addition to reducing the number of managers, Goodarzi the cuts would also serve to “rightsize” staffing for Intuit’s email marketing product, Mailchimp. One customer experience leader in that organization wrote on LinkedIn that after more than eight years it was hard to believe he would no longer work for Mailchimp. 

“Mailchimp… it’s ridiculous to get emotional over a piece of software, but if folks understood what this company meant to the city of Atlanta. It was our brand right alongside Coca-Cola, Delta, and The Home Depot … it was OUR tech company,” he wrote. “It was also a company willing to take a risk on folks … I’m still processing that Mailchimp and Intuit will no longer be my home. Keep an eye out for me if you don’t mind.”

Goodarzi said the cuts were not in response to any underperformance, but were deliberate actions to scale its “growth engine and strengthen its core.” 

“We are at an important inflection point,” he said. “To fully capitalize on this opportunity, we must operate with greater velocity, urgency, and discipline. These deliberate actions are about scaling our growth engine and strengthening our core. We’re sharpening our cost structure to deliver durable long-term growth and margin expansion.”  ®