UiPath to cut 5% of its workforce as part of restructuring plan

UiPath IPO on the New York Stock Exchange.

Source: New York Stock Exchange.

UiPath will cut approximately 5% of its total staff as part of the restructuring plan, according to to a new SEC filing.

The company, a software provider for automating office tasks, said it had 4,200 employees as of April 30, 2022. Most layoffs are expected to occur by the end of July.

UiPath’s board approved the decision to cut staff, citing the need to increase profits, the Securities and Exchange Commission said in a statement.

The software vendor estimates that it will spend $15 million as part of the plan, mostly on severance pay and employee compensation payments.

A spokesperson told CNBC that UiPath’s layoffs are not related to market conditions.

“In the context of ongoing business prioritization, UiPath is undertaking restructuring actions that will primarily focus on the effectiveness of our go-to-market organization,” a spokesperson said, noting that the company believes the cuts will help streamline its go-to-market. approach to the market and leads to increased sales productivity and better market segmentation.

Shares of UiPath fell about 1% in Monday afternoon trading and are down about 49% year-to-date. But the shares are up about 23% in a month after the company reported on its financial position. profit for the first quarter on June 1 this topped previous forecasts and raised the outlook for the next quarter.

“It is about continuing sustainable and profitable growth. We want to thank our departing team members – we appreciate their incredible talent and contributions to supporting UiPath and our mission,” the spokesperson added.

The software provider has over 45 offices in the US, Europe and Asia.

“The announcement signals PATH’s growing focus on profitability amid growing investor focus on limited profitability, free cash flow tech stocks,” analysts at Cowen said in a note to investors on Monday. “He has demonstrated his commitment to his long-term target of 20% adjusted EBIT, and this news reflects the first major changes since the recent senior management appointments (new co-CEO and chief business officer).”