Okta lays off 400 employees: Read CEO’s memo

• Okta confirmed to Business Insider on Thursday that it will cut its workforce by 7%.
• The ID verification company said it was “necessary” to meet its “commitment to profitable growth.”
• The layoffs continue the trend of layoffs that hit workers hard in January.

Okta will reduce its workforce by 7% on Thursday.

The ID verification company told Business Insider it was a “necessary” decision to ensure profitable growth.

CEO Todd McKinnon told employees in a memo sent at 5:30 a.m. PT that the company would lay off about 400 employees. In a memo shared with BI, he said employees will learn via email 15 minutes after receiving the memo whether they are affected or not.

Okta cut 300 full-time employees last February, the SEC announced. filing showed that. The company told Business Insider that its latest global employee count before Thursday’s layoffs was 5,913.

McKinnon told staff. memo Last year, the company announced layoffs because it was growing too fast and had a surplus of employees. He added that the job cuts are part of a restructuring plan that will begin in 2023.

“We entered fiscal year 2023 with a growth plan based on the demand we experienced in the previous year,” he said.

He added: “This has created overemployment in line with today’s macroeconomic realities. Furthermore, in the first half of 2019, [fiscal 2023], we faced implementation challenges of our own. ”

In announcing this year’s job cuts, McKinnon said costs remained too high and overall spending needed to be “considered.”

The layoffs are the latest in a wave of layoffs sweeping the technology industry. Okta follows in the footsteps of companies like Amazon, Google, and SAP that slashed roles last month.

Please read the memo sent by Mr. McKinnon below.

Hey, guys,

After careful consideration of our 25-year business planning process, my management team and I have made the difficult decision to implement layoffs that will impact approximately 7% of our company, or approximately 400 people.

If you work in the US, you will receive an email within 15 minutes letting you know if your role is affected. If your role is affected, your leader will schedule a meeting today to discuss next steps. For non-U.S. employees identified as affected or at risk, the notification process may vary based on local laws and practices.

I know this is difficult news, but I would like to explain a little bit about how we came to this decision.

To grow profitably, you need to run your business more efficiently. Although we have made progress in the right direction, the reality is that costs remain too high. You need to be mindful of your overall spending so you can continue to invest in the areas, products, and routes to market that offer the greatest opportunities. To capture our huge potential and build an iconic company, we need to be thoughtful about where we place our bets. This step is a proactive measure to set the company up for long-term success.

We would like to express our deepest apologies to all affected employees and thank them for their many contributions. We are committed to supporting our customers during this transition period and providing all possible resources to support them during this time. Affected U.S. employees will receive an additional period of payroll, his RSU vest in March (if eligible), cash severance, extended health insurance, job placement resources, and benefits for those with company-sponsored visas. Receive migration support, including support for Outside the U.S., our processes and severance payments are consistent with local laws and practices, including consultation with potentially affected employees, as appropriate, before decisions are confirmed. .

Our priority today is to manage this transition as respectfully as possible. As we navigate these changes, we must remember that Okta is a critical infrastructure for our 18,800 organizations around the world. We look forward to his future work with Okta, which positions us well to expand our leadership position and execute on our vision of enabling everyone to use any technology securely. .

tod