Okta to cut 400 jobs in new restructuring plan
Identity management company Okta (OKTA) is laying off seven percent of its workforce as part of a broader restructuring effort. The job cuts are expected to combat costs of up to $24 million in restructuring charges in the fourth quarter.
Okta's move represents the latest in a wave of technology companies reducing headcount to cut costs amid economic uncertainty.
Yahoo Finance's Akiko Fujita and Rachelle Akuffo break down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
AKIKO FUJITA: Taking a look at today's trending ticker. We are watching shares of Okta up just slightly here on news, it's cutting 400 employees. That's roughly 7% of its staff. All part of a restructuring plan. According to the company, it's estimating it will take a $24 billion hit in its fourth quarter from restructuring charges.
Rachelle, it has been a tough week, when you think about all of the job cut announcements that have come through. We were talking about UPS earlier this week, 12,000 job cuts. PayPal, cutting 9%. Was looking at the total today, this year alone, roughly 29,000 tech jobs cut, so far.
And the story we're hearing out of Okta seems like something we've heard out of other companies. It's efficiency. It's about over hiring, trying to save costs. But certainly, it's still a tough day for employees.
RACHELLE AKUFFO: It's true. Looking through the details of that 8-K filing with the SEC. He really does talk about some of the overhiring that they had before. When you look at where the share price was in 2021, peak of the pandemic, $290. Looking at it now sitting at about $83.
So clearly, off those peaks, they overhired to meet that demand of everybody working from home. But then they cut those 300 jobs last year, and then an additional now 400 being announced here. And then also having to contend with some of the data breaches to some of their customers with their support case management system. And then separately, a hack last year of MGM and Caesars as well. So really trying to-- I guess they're holding their feet to the fire here, trying to cut costs where they can, and still continuing to see these post-- these pandemic overhiring hangovers continuing to linger.
AKIKO FUJITA: Yeah. The CEO Todd McKinnon there saying that costs are still too high. He says, this is about growing profitability. That the company needs to run a business with greater efficiency. It feels like something we've heard from other companies, as well.
RACHELLE AKUFFO: That's true. Unfortunate, indeed.
