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Intuit Cuts 715 Jobs to Focus on AI-Based Business Model

Zacks Equity Research
·3 mins read

Intuit INTU recently notified its employees that it has laid-off 715 staff members in an attempt to focus more on enhancing various facets of its business, including customer experience, technology and sales, as part of its ongoing transition to an AI-driven platform.

The transformation was announced last year. Since then, Intuit has continued to accelerate the application of AI to create tools to automate repetitive tasks, increase efficiency and improve customer experience.

As more customers turn to virtual solutions, small businesses are shifting to omnichannel commerce, prompting Intuit to reinvent its business. Notably, in its last reported quarter, total Desktop Ecosystem revenues declined 6% year over year to $422 million.

Intuit Inc. Price and Consensus

Intuit Inc. Price and Consensus
Intuit Inc. Price and Consensus

Intuit Inc. price-consensus-chart | Intuit Inc. Quote

Keeping up with the plan to streamline its investments in capabilities to accelerate the strategy, the company identified several roles, tools and systems as redundant. The 7.3% reduction in headcount brings the total number of global Intuit employees to about 9,101.

The company, however, will bear the lay-off costs and pay a minimum of four months’ salary (two extra weeks for every year of service) and provide health insurance benefits to every affected employee. Moreover, every laid-off employee will have access to six months of career transition and job placement services through RiseSmart. Apart from this, Intuit will not take back the work laptops from affected employees.

Additionally, the company plans to add more than 700 job roles in line with its transformation strategy. Notably, management is optimistic about the growing clout of TurboTax Live and QuickBooks Live, which is expected to help the company acquire new customers with enhanced engagement and drive average revenue per customer. This is likely to be accretive to the company’s Consumer business in the days ahead.

Intuit is taking strong steps to keep its business up to date. Notably, this February, it announced plans to acquire privately-held personal finance portal, Credit Karma, for about $7.1 billion, to penetrate the consumer finance space further. This will be the largest deal in the company’s history.

Zacks Rank & Stocks to Consider

Intuit currently carries a Zacks Rank #5 (Strong Sell).

A few better-ranked stocks in the broader technology sector are Mercury Systems Inc MRCY, Fortinet, Inc. FTNT, and Baozun Inc. BZUN, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Mercury, Fortinet and Baozun is currently pegged at 15.72%, 14% and 29%, respectively.

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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

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Intuit Inc. (INTU) : Free Stock Analysis Report
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