Key Takeaways

  • Intuit, the parent company of TurboTax, announced on Wednesday during its third-quarter earnings report that it will cut 17% of its full-time workforce, approximately 3,000 employees, to "simplify its organizational structure." The software provider stated in a press release that the move aims to improve operational efficiency.
  • Intuit Chief Financial Officer Sandeep Aujla said during Wednesday's earnings call that "a leaner structure will accelerate our operations, enhancing focus, speed, agility, and strengthening our commitment to profitability." According to the call transcript, as part of the restructuring plan, the company will also "right-size" its investment in the Mailchimp product.
  • Executives at the Mountain View, California-based company, including Aujla and CEO and Chairman Sasan Goodarzi, insisted in response to analyst questions that the layoff decision was "not about AI." Goodarzi said the cuts stem more from the company's thinking about "how to maintain a builder-driven culture that moves fast."

Deep Dive

Aujla, responding to the same analyst's question, confirmed that the layoffs are fundamentally about continuing to invest in the tax and accounting software provider's three major "Big Bets."

According to a memo Goodarzi issued on May 20 following the layoff announcement, these strategies include expanding its AI-native platform, becoming the "center of money" for customers, and expanding its "authority and right to win" in the mid-market.

The layoffs differ from the 2024 decision—when the company cut about 1,800 employees due to a strategic shift toward AI—because Intuit expects most of the cost savings from the 2026 decision "will flow directly to profit," Aujla said. "The core is what Sasan mentioned: three assets—a focused organization, a flat organization, and a fast organization."

Although executives sought to distance the layoffs from AI, they simultaneously emphasized the importance of continued deployment of AI technology to Intuit's future growth.

Goodarzi said Wednesday that AI is "embedded in everything we do, helping us serve our customers, and that is what drives our growth." Meanwhile, Intuit's investment in its proprietary generative AI operating system has "enabled us to drive innovation for customers at an unprecedented pace," according to its third-quarter 10-K filing with the U.S. Securities and Exchange Commission for the period ending April 30.

The company wrote in the filing: "The AI era is igniting global innovation at an astonishing pace and will fundamentally change every aspect of how we work and live. We placed our bets on AI back in 2019, announcing our AI-driven expert platform strategy. We have transformed our company from a tax and accounting platform into an AI-driven expert platform."

Intuit joins several tech companies that have announced layoffs in recent months, which have generally significantly increased spending on AI technologies and tools. Cisco Systems earlier this month announced plans to cut 4,000 employees to strengthen its AI focus, as previously reported by CFO Dive.

Meanwhile, Facebook parent company Meta announced on Wednesday that it will cut 10% of its workforce, approximately 8,000 employees, to accelerate its AI efforts, according to CNBC.

Meta CEO Mark Zuckerberg said in a memo to employees about the layoffs that "success is not guaranteed" in the AI industry, per CNBC.

Intuit expects to incur $300 million to $340 million in charges related to the restructuring, with most expected to be recognized in the fourth quarter, according to its third-quarter earnings report. In the quarter, Intuit reported GAAP operating income of $4 billion, up 8% year over year; total revenue increased 10% year over year to $8.6 billion.