UiPath IPO at the New York Stock Exchange.
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, the Securities and Exchange Commission filing said.
The software provider estimates that it will spend $15 million as part of the plan, mainly to pay for employee severance and compensation benefits.
A spokesperson told CNBC that UiPath’s layoffs are not related to market conditions.
“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.
Shares of UiPath were off about 1% in midday trading on Monday and are down about 49% year to date. But shares are up about 23% for the month after the company reported fiscal first-quarter earnings on June 1 that exceeded prior guidance and raised the outlook for the following quarter.
“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 U.S., 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).”