A California Company Now Announces Unexpected Layoffs

February 1, 2024

A California company now announces unexpected layoffs after the CEO blames rising costs in the industry for the job cuts.

Identity management company Okta said on Thursday in a message to employees that it would lay off a total of 400 employees, which is about 7% of the company’s headcount.

CEO Todd McKinnon said in his message that the “reality is that costs are still too high.”

Shares of the company rose around 3.6% in premarket trading on the news.

Okta is only the latest tech company to trim headcount in the opening weeks of 2024.

Nearly 24,000 tech workers lost their jobs in January alone, even as many tech companies saw their stock prices continue to grow, reports CNBC.

McKinnon said the firm needed to be more “thoughtful” about where it was investing to achieve “long-term success.”

The firm underwent its last round of layoffs in February 2023.

It was a smaller round of cuts, affecting only about 300 employees, and at the time, McKinnon said that prior over-hiring had led to unsustainable staffing levels.

“In order to grow profitably, we need to run the business with greater efficiency.

While we’ve taken steps in the right direction, the reality is that costs are still too high.

We need to be mindful of our overall spend so we can continue to invest in the areas, products, and routes to market with the most opportunity.

To capture our massive potential and build an iconic company, we must be thoughtful about where we place our bets.

This action is a proactive measure to help set the company up for long-term success,” the CEO said in a letter.

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Also Read: A Massive Furniture Company Now Lays Off 1,650 Employees

Other Economy News Today

This massive bank will now cut a whopping 3,500 jobs while rewarding its shareholders, an effort to win back investors.

Deutsche Bank said on Thursday it would cut 3,500 jobs, buy back shares and pay dividends, in its latest pitch to investors that its turnaround remains on track.

The news came as Germany’s biggest bank, seeking to put years of turmoil behind it and focus on steadier retail banking, reported a 30% drop in fourth-quarter profit that still beat analyst expectations.

The bank had already announced plans to cut jobs, but this was the first time it had put a number on the layoffs, equivalent to just under 4% of its global workforce of about 90,000.

The jobs affected will be back office roles.

The share buyback and dividends will total 1.6 billion euros ($1.7 billion) and will take place during the first half of the year.

Deutsche Bank also raised its forecast for revenue growth, and its shares rose 4% in early Frankfurt trade.

The announcements and earnings come at a significant turning point for Deutsche Bank, reports Reuters.

Deutsche Bank’s retail unit overtook the investment bank as the main revenue driver in 2023.

Analysts expect the retail operations to keep up its streak ahead of the investment bank this year and next even as central banks gear up to cut the interest rates that have supercharged banks’ bottom lines.

However, the rise of the retail division has also been scrutinized by regulators after Deutsche Bank botched the integration of its Postbank arm, leaving customers complaining that they were locked out of their accounts and unable to reach call centers.

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Also Read: A US Bank is Now Denying Customers Access to Money

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