DocuSign, the leading electronic-signature company, has revealed its decision to implement a cost-saving restructuring plan that will result in a reduction of approximately 6% in its current workforce. The company plans to restructure by cutting around 400 positions, primarily affecting the sales and marketing teams.
This strategic move aims to bolster DocuSign’s financial standing while also enabling investments in product development and related initiatives. These investments are essential in realizing the company’s long-term growth goals as an independent public entity. It is worth noting that this announcement comes after reports in December that DocuSign had engaged external advisors to explore the possibility of a potential sale.
As a result of the restructuring, DocuSign estimates incurring charges between $28 million to $32 million, primarily allocated to employee severance and benefits expenses. The majority of these charges will be accounted for in the first quarter of 2025, and the overall restructuring plan is expected to conclude by the second quarter of 2025.
Chief Executive Allan Thygesen expressed the importance of managing the business to enhance profitability and focus on initiatives that provide the strongest foundation for sustained growth. Thygesen emphasized that although the impact of their new products on crucial performance metrics, such as bookings, billings, and revenue, may take time, it is instrumental to remain attentive towards long-term success.
As news of the restructuring plan emerged, DocuSign’s stock experienced a 5.1% decline during premarket trading on Tuesday, reaching $50.45 per share. This setback adds to the 20% drop the stock experienced over the past year.
It is worth noting that several other notable tech companies have also implemented workforce reductions this year. For instance, Snapchat’s parent company, Snap, as well as cloud software company Salesforce, Microsoft’s gaming division, and Alphabet’s Google have announced similar measures.