OpenText Announces Job Cuts, Reinvestment Strategy as Part of New Plan

Enterprise software provider OpenText Corp. said today in a filing with the Securities and Exchange Commission that it plans to cut 1,200 jobs as part of a corporate optimization plan aimed at saving the company $200 million annually.

The job cuts are part of what OpenText CEO Mark Barrenechea calls “OpenText 3.0,” a three-year strategic plan aimed at optimizing operations, driving innovation and ensuring sustainable growth in a rapidly changing market. The plan focuses on improving customer success, achieving market leadership, accelerating growth and increasing margins, all through advanced data management.

OpenText focuses on enterprise clouds that automate and drive knowledge worker productivity, enterprise artificial intelligence, and the application of generative AI to transform business processes and enterprise technology to ensure security and compliance for global enterprises.

As part of the plan, Barrenechea emphasizes that the company is working to “place the right talent in the right places in our business,” hence the job cuts. While the number of positions being eliminated is 1,200, OpenText said it will reinvest the savings into creating 800 new positions in sales, professional services and engineering to support the OpenText 3.0 plan.

The savings from the job cuts are expected to allow OpenText to reduce its annual expenses by $150 million, with the cost of the job cuts estimated at approximately $60 million. OpenText currently has approximately 23,000 employees.

“We are excited to continue our growth and increase our market share by helping our customers transform,” Barrenechea said in a blog post. “Along with our plans to capture significant margin expansion opportunities and execute on a strong capital allocation, we are confident that we will deliver significant long-term value to all of our stakeholders.”

Tech layoffs have dominated the headlines through 2024, as a struggling venture capital industry, global instability, inflation and high interest rates have pushed tech companies large and small to look to cut costs.

Companies that have laid off workers this year include Google LLC, which laid off at least 200 employees on May 1; Cisco Systems Inc., which announced plans to lay off thousands of workers in February; and Dell Technologies Inc., which said it laid off 13,000 workers in March. Microsoft Corp. also announced plans to lay off hundreds of employees at its Azure cloud business in early June.

Photo: OpenText