Key Points:
- Intuit plans to cut 17% of its workforce, laying off approximately 3,000 employees.
- The company’s stock crashed 20% to $307.07 on Thursday, marking its worst single-day drop in 23 years.
- Slower-than-expected sales of TurboTax raised fears that artificial intelligence is starting to disrupt the financial software market.
- Despite the massive layoffs and stock drop, Intuit beat quarterly expectations by reporting $8.56 billion in total revenue.
Intuit Inc. suffered its most devastating stock market crash in over two decades on Thursday. The financial software company watched its shares plummet 20% to close at $307.07. Investors panicked after the firm announced a massive plan to lay off 17% of its global workforce, cutting approximately 3,000 jobs. The sudden stock collapse marks the company’s worst single-day performance since March 2003 and leaves the stock down 54% for the year.
Adding to the market panic, Intuit reported slower-than-expected sales for its flagship tax software, TurboTax. This sudden weakness reignites a fierce debate on Wall Street about whether artificial intelligence is actually hurting the company’s core business model. Kirk Materne, a leading financial analyst at Evercore ISI, noted that investors worry that free or low-cost artificial intelligence tools might steal customers from traditional paid software like TurboTax.
The job cuts will have a significant impact on families across the globe, but Intuit defended the move as a necessary step to secure its future. The company expects to pay about $320 million in restructuring charges, with most of those expenses hitting the current quarter. Management aims to simplify the entire organizational structure, turning the business into a faster, leaner, and more focused company.
Like many of its competitors in Silicon Valley’s software industry, Intuit wants to trim payroll costs so it can redirect millions of dollars toward developing next-generation artificial intelligence products. Sasan Goodarzi, the Chief Executive Officer of Intuit, stated that the company is actively scaling its growth engines. He believes structuring a faster organization will help deliver durable, long-term growth as artificial intelligence becomes a permanent part of daily financial management.
Intuit is certainly not the only technology giant slashing its workforce to fund expensive artificial intelligence projects this year. Just one day before Intuit’s announcement, Meta Platforms Inc. warned about 8,000 of its own employees that they were losing their jobs. Meta executed those cuts for the same reason: to reduce daily operational costs so it can pour billions of dollars into building powerful computing servers and training new artificial intelligence models.
This marks the second time in recent years that Intuit has executed a massive round of job cuts to restructure its business. Back in July 2024, the company laid off 1,800 employees, which represented about 10% of its total workforce at the time. During that previous round, executives promised to rehire the same number of people in more technical roles. Despite those changes, the company grew to about 18,200 employees by July 31, 2025, before initiating its latest round of 3,000 layoffs.
The massive stock crash overshadowed what was actually a strong quarterly earnings report. For the third fiscal quarter, which ended on April 30, Intuit reported that its total revenue increased by 10% to hit $8.56 billion. This performance actually beat the average estimates of Wall Street analysts. The company also reported an adjusted profit of $12.80 per share, comfortably beating the $12.54 per share projected by Bloomberg analysts.
The company also shared an optimistic financial outlook for the upcoming fourth quarter, which ends in July. Intuit expects its total revenue to increase by 11% to 12% year over year. This projection easily beats the modest 8% growth rate that analysts originally predicted. The firm also expects its adjusted earnings to range from $3.56 to $3.62 per share, significantly higher than the Wall Street estimate of $3.15 per share.
For now, the optimistic future forecasts are not doing enough to calm nervous shareholders. Wall Street cares far more about the near-term health of TurboTax and the massive cost of firing 3,000 workers than it does about long-term profit projections. The company must now prove to its investors that its expensive pivot toward artificial intelligence will actually pay off before its stock loses even more of its value.
