OpenText announces job cuts and reinvestment strategy under new plan – SiliconANGLE

Enterprise software provider OpenText Corp. announced today in a Securities and Exchange Commission filing that it plans to cut 1,200 jobs as part of a business optimization plan aimed at saving the company $200 million per year.

The jobs cuts are part of what OpenText Chief Executive Officer Mark Barrenechea is calling “OpenText 3.0,” a three-year strategic plan that aims to optimize operations, drive innovation and ensure sustainable growth in a rapidly evolving market. The plan focuses on enhancing customer success, achieving market leadership, accelerating growth and expanding margins, all powered by advanced data management.

OpenText is focusing on business clouds that automate and drive productivity for knowledge workers, business artificial intelligence and the application of generative AI to transform business processes and business technology to ensure security and compliance for global businesses.

As part of the plan, Barrenechea notes that the company is focused on “placing the right talent in the right locations of our business,” hence the job cuts. Although the number of jobs being cut is 1,200, OpenText said it will reinvest savings into creating 800 new roles in sales, professional services and engineering to support the OpenText 3.0 plan.

The savings from the job cuts are expected to reduce OpenText’s annual expenses by $150 million, with the cost of the job cuts coming in at approximately $60 million. OpenText has around 23,000 employees currently.

“We are very excited about opportunities going forward to continue our growth and increase our market share by helping our customers transform,” Barrenechea said in a blog post. “Along with our plans to pursue large margin expansion opportunities and execute on strong capital allocation, we are confident we will deliver significant long-term value for all our stakeholders.”

Tech companies laying off staff has been regular news through 2024 as a struggling venture capital sector, global instability, inflation and high interest rates have seen tech companies large and small look to cut their costs.

Notable companies laying off staff this year include Google LLC, which laid off at least 200 employees on May 1; Cisco Systems Inc., which announced plans to lay off thousands in February; and Dell Technologies Inc., which announced that it had laid off 13,000 employees in March. Microsoft Corp. also announced plans to lay off hundreds of employees from its Azure cloud business in early June.

Photo: OpenText