UiPath will reduce roughly 5% of its total workforce as part of a restructuring plan, according to a new SEC filing.
The company, a provider of software for automating office tasks, said that it had 4,200 employees as of April 30, 2022. Most of the layoffs are expected to occur by the end of July.
UiPath’s board approved the decision to reduce headcount, citing the need to increase profits by restructuring its market organization, the filing said.
The company estimates that it will spend $15 million on restructuring expenses, mainly to pay for employee severance and compensation benefits.
A spokesperson told CNBC that UiPath’s layoffs are not related to market conditions.
Shares of UiPath are down 2% Monday and are down 50% year-to-date. But, shares are up about 20% for the month after the company exceeded its guidance and raised its outlook in its fiscal Q1 earnings reported on June 1.
“In the context of ongoing business prioritization, UiPath is undertaking a restructuring action that will primarily focus on the effectiveness of our go-to-market organization,” the spokesperson said, noting that the company believes the cuts will help it simplify its go-to-market approach and lead to higher sales productivity and better market segmentation.
“This is about continuing to drive sustained, profitable growth. We want to thank our departing team members—we appreciate their incredible talent and contributions in support of UiPath and our mission,” the spokesperson added.
The software provider has more than 45 offices across the US, Europe, and Asia.
“The announcement signals PATH’s increasing focus on profitability amid growing investor scrutiny on tech stocks with limited profitability & FCF.” Cowen analysts said in a note to investors on Monday. “It had signaled its commitment to its longer-term 20% adj EBIT target and this news reflects the first major changes put into place post its recent senior management appointments (new Co-CEO and Chief Business Officer).”