DocuSign
stock was falling Tuesday after the electronic-signature company said it was cutting 6% of its staff under a cost-saving restructuring plan.
DocuSign
said in a news release Tuesday that it will restructure and reduce its current workforce by about 6%. The cuts will impact around 400 employees, with a majority of the layoffs expected to hit the sales and marketing teams.
The restructuring plan is designed to strengthen the company’s financial standing while it invests in product and related initiatives “that will provide the foundation to realize its multi-year growth aspirations as an independent public company,”
DocuSign
said.
The Wall Street Journal reported in December that DocuSign had hired outside advisors to explore a potential sale. Reuters reported on Monday that talks with private-equity firms Bain Capital and Hellman & Friedman had stalled over disagreements on how much to pay for DocuSign.
When asked to comment on the Reuters report, DocuSign told Barron’s in a statement Tuesday that as the CEO wrote in the note to employees, “we believe we have a strong opportunity ahead of us as an independent, public company.”
Bain declined to provide a comment to Barron’s, while Hellman & Friedman did not immediately respond to a request for comment.
DocuSign expects to incur restructuring charges of between $28 million to $32 million as it pays out employee severance and benefit costs. Most of the charges will be incurred in the first quarter of fiscal 2025, while the total restructuring plan should be completed by the second quarter of 2025.
“It will take time for our new products to make a material impact on key metrics including bookings, billings, and revenue,” Chief Executive Allan Thygesen said in a letter to employees. “This reality makes it critical for us to manage our business to improve profitability and focus investment on initiatives that provide the strongest foundation for long-term growth.”
DocuSign also added that it expects fourth quarter and fiscal 2024 financial results will meet or exceed the ranges previously provided in its third-quarter earnings release on Dec. 7.
Shares of DocuSign were falling 4.5% Tuesday to $50.83. The stock has dropped 23% in the past 12 months.
Other tech companies have announced job cuts this year, including Snapchat parent
Snap,
cloud software company
Salesforce,
Microsoft’s
gaming division, and
Alphabet’s
Google.
Write to Angela Palumbo at [email protected]
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