Okta said it would lay off 400 employees, about 7% of the company's workforce.
CEO Todd McKinnon said in his message to employees that “the cost is still too high.”
Okta is the latest tech company to announce layoffs since early 2024. Thousands of employees lost their jobs in January alone.
McKinnon said the company needed to be more “thoughtful” about where it invested in order to achieve “long-term success.”
See also: PayPal: Plans thousands of layoffs for 2024
Okta's previous round of layoffs took place in February 2023. About 300 employees , and the CEO said he took this move to limit costs incurred from overhiring in the previous period.
McKinnon explained now that together with the rest of the leadership team they made the difficult decision to reduce the company's workforce by 400 people.
The company has notified affected individuals via email , and executives will also speak with individuals in person about next steps. For employees outside the U.S., the notification process may vary based on local laws and practices
Among other things, McKinnon wrote to employees: “To grow and be profitable, we need to run the business more efficiently. While we have made steps in the right direction, the reality is that costs are still too high. We need to be mindful of our overall spending so we can continue to invest in the areas, products and services with the most opportunity. To realize our enormous potential and create an iconic company, we need to think about where we place our bets. This action is a proactive measure to help the company prepare for long-term success.”
See also: Salesforce: Announces layoffs of 700 employees
The CEO said, moreover, that he thanks the people for their contribution to the company and is committed to supporting them (severance, health care, etc.) during this transition.
Concluding, McKinnon said, “Our priority today is to manage this transition as respectfully as possible. As we navigate these changes, remember that Okta is critical infrastructure for 18,800 organizations around the world. We look forward to working with Okta in the right place to expand our leadership and realize our vision of enabling everyone to securely use any technology.”
The Okta layoffs are yet another example of the crisis that has gripped the tech industry in recent times. Layoffs on such a large scale can have a significant impact on the tech job market . The increased availability of workers can lead to increased competition for available jobs, forcing workers to accept lower wages or less attractive working conditions.
Layoffs may also discourage young people from pursuing careers in technology, reducing the talent supply in the future. This could have long-term implications for innovation and growth in the sector.
See also: eBay announces layoffs of 1000 employees
Layoffs can then have a psychological impact on employees, increasing uncertainty and fear of job instability. This can lead to reduced productivity and creativity, as employees may be less willing to take risks or invest in new ideas.
Source: www.cnbc.com
