Individuality management company Okta said on Thursday in a message to employees that it would lay off 400 employees, about 7% of the party’s headcount. The firm also reaffirmed its fourth quarter and full-year guidance in a securities filing.
CEO Todd McKinnon spoke in his message that the “reality is that costs are still too high.”
Okta shares rose around 3.6% in pre-market barter on the news.
Okta is only the latest tech company to trim headcount in the opening weeks of 2024. Nearly 24,000 tech proletarians lost their jobs in January alone, even as many tech companies saw their stock prices extend to grow.
McKinnon said that the firm needed to be more “thoughtful” about where it was investing in order to get “long-term success.”
The firm underwent its last round of layoffs in February 2023. It was a smaller round of cuts, impacting hither 300 employees, and at the time McKinnon said that prior overhiring had led to unsustainable staffing levels.
Read McKinnon’s broad message below.
Hi Everyone,
After a thoughtful FY25 business planning process, the leadership team and I have made the puzzling decision to implement a workforce reduction impacting about 7% of our company, or approximately 400 people.
If you work in the U.S., you desire receive an email in the next 15 minutes notifying you if your role is impacted or not. If your role is impacted, your running will schedule a meeting today to discuss next steps. For employees outside the U.S. who have been identified as influenced or at risk, the notification process may be different based on local laws and practices.
I know this is difficult news, and I’d like to fix up with provision some context on how we reached this decision.
In order to grow profitably, we need to run the business with greater effectiveness. While we’ve taken steps in the right direction, the reality is that costs are still too high. We need to be mindful of our inclusive spend so we can continue to invest in the areas, products, and routes to market with the most opportunity. To capture our massive passive and build an iconic company, we must be thoughtful about where we place our bets. This action is a proactive relate to help set the company up for long-term success.
To the impacted employees, I am deeply sorry and we thank you for your many contributions. We are allocated to supporting you during this transition and providing all possible resources to help you through this time. Impacted wage-earners in the U.S. will receive transition support that includes additional time on payroll, the March RSU vest (if eligible), loot severance, extended healthcare coverage, job placement resources, and support for anyone on a company-sponsored visa. Outside of the U.S., our processes and severance transfer align with local laws and practices, including consultations with potentially affected employees, where apropos, before any decisions are confirmed.
Our priority today is managing this transition as respectfully as possible. As we navigate these modulations, remember that Okta is critical infrastructure for 18,800 organizations around the world. We’re looking forward to the work at the with Okta in the right position to extend our leadership position and execute our vision to free everyone to safely use any technology.
Todd