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Intuit Inc. (NASDAQ:INTU) shares are trading lower after the company announced a reorganization plan aimed at reallocating resources to its key growth areas.
As part of this plan, the company will lay off approximately 1,800 employees and close its Boise and Edmonton sites.
The company plans to hire a nearly equivalent number of employees in fiscal 2025 to support its growth initiatives, expecting overall headcount to increase.
The reorganization will incur charges estimated between $250 million and $260 million, primarily in the fourth fiscal quarter ending July 31, 2024.
These charges include $217 million to $227 million for severance payments and employee benefits, and $33 million in non-cash charges related to share-based compensation and site closures.
Intuit aims to complete these actions by the first fiscal quarter ending October 31, 2024, subject to local laws and consultations.
Also Read: Intuit Shares In Focus As Analyst Puts New Subscription Model, GenAI, Tax Laws Into Perspective
The company may also incur additional charges due to unforeseen events during the implementation of the reorganization plan.
Intuit, known for its QuickBooks accounting software, aims to increase investments in generative AI and expand into new markets such as Canada, the United Kingdom, and Australia, reported Reuters.
The company said 1,050 employees are leaving because they are not meeting expectations. The company is consolidating 80 technology roles to locations including Atlanta, Bengaluru, and Tel Aviv. About 300 roles are being eliminated to streamline operations.
Intuit stock has gained more than 34% in the last 12 months. Investors can gain exposure to the stock via IShares Expanded Tech-Software Sector ETF (BATS:IGV) and Global X FinTech ETF (NASDAQ:FINX).
Price Action: INTU shares are trading lower by 4.15% at $623.45 at last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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