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DocuSign has revealed that it’s laying off 6% of its workforce, impacting some 400 employees.
In an SEC filing, the e-signature software company said that the “restructuring plan” will mainly impact those in its sales and marketing teams, and is likely to cost DocuSign between $28 and $32 million in terms of severance payouts, benefits and other associated costs.
The announcement comes amid growing rumors that DocuSign was the target of a $13 billion takeover bid, with private equity firms Bain Capital and Hellman & Friedman reportedly jostling for the deal. However, Reuters reported yesterday that their interest had cooled after failing to reach an agreement on the fee, though the prospect of talks resuming remains a possibility.
As with many companies during the pandemic, DocuSign’s fortunes soared due to the rush toward remote everything, hitting a market cap of more than $60 billion in 2021. But reality bit as the world transitioned back to something close to normality, with DocuSign’s valuation nestling closer to its pre-pandemic level at around the $10 billion mark.
DocuSign is the latest in a line of tech companies to undergo more than one round of layoffs in the pursuit of cost-cutting. Indeed, the company laid off 9% of its workforce in late 2022 followed by a further 10% just months later, though it transpired these were part of the same round of layoffs.
DocuSign says that round two of its layoffs is designed to “strengthen and support its financial and operational efficiency,” and that it expects to “meet or exceed” its financial guidance at its Q4 2023 earnings next month. In an email sent to employees today, DocuSign CEO Allan Thygesen said that they had to reduce operating costs because it will “take time” for its latest product releases and updates, which includes a new WhatsApp integration, to make any meaningful impact on its revenues — and that they had explored other cost-cutting avenues.
“I asked the Executive Leadership Team to reduce operating costs for FY25, starting with an emphasis on operating costs other than current employee headcount, including areas such as program spend, professional fees, non-critical open roles, and more. These reductions are already being implemented,” Thygesen wrote. “However, after evaluating where we are as a business, we concluded that further action was needed.”