Intuit suffers worst plunge since 2003 after announcing job cuts
Intuit Inc. experienced its most significant stock decline in over two decades after announcing plans to reduce its workforce by approximately 17% and reporting slower-than-anticipated TurboTax sales. The company's shares recorded their worst plunge since 2003.
The job cuts are part of an effort to simplify the organization, aiming to transform Intuit into a "faster, leaner, more focused company," according to a company statement released Wednesday alongside its fiscal third-quarter results. These reductions are also intended to trim costs while the financial software company invests in artificial intelligence products.
Intuit is cutting about 3,000 workers, representing roughly 17% of its staff. The company expects to incur approximately $320 million in restructuring charges, primarily in the current period.
Analysts noted a small miss in revenue for TurboTax. This weakness has reopened discussions among analysts regarding the potential impact of artificial intelligence on Intuit's business, according to Kirk Materne, an analyst at Evercore ISI.
Despite the reported sales weakness, Intuit projected revenue growth of 11% to 12% for the current period ending in July. This forecast exceeds analysts' average estimate of 8% growth.
The stock's decline contributed to its year-to-date performance, with shares down 54% for the year as of Wednesday.
The announcement from Intuit follows similar actions in the broader technology sector. Meta Platforms Inc. also notified approximately 8,000 employees of job losses on Wednesday. Meta's cuts are part of a previously announced restructuring aimed at reducing costs while the company invests heavily in artificial intelligence.