A tech company based in the San Francisco Bay Area bragged about its strong third-quarter results — only to announce that it was laying off hundreds of employees.
Informatica, a cloud-based AI data company, put out a press release that quoted CEO Amit Walia touting “another strong step forward” for the company.
“Our team delivered another quarter exceeding guidance for the top and bottom line as we help customers increase productivity, drive efficiency, and become AI-led, data-driven companies,” Walia said last Wednesday.
The release went on to list the firm’s achievements during the three-month period that ended in late September, including “total revenues increased 10% year-over-year to $408.6 million” and a 7% year-over-year increase of annual recurring revenue to $1.58 billion.
Informatica also crowed about the “industry recognition” it received from the likes of J.D. Power and others for its “outsanding customer service experience” as well as its “master data management.”
But after revealing all the good news, Walia’s release announced a “restructuring plan” for Informatica that entails “reduc[ing] its workforce by approximately 545 employees” — or 10% of the firm’s global headcount.
The laid off employees will be out of a job effective Dec. 31, according to the firm.
The move is made in order to “further streamline the company’s cost structure as a direct result of its cloud-only, consumption-driven strategy” promoting “continued AI-powered production innovation and strong…growth with a lower expense base and higher operating margins.”
The company also announced that its board authorized a stock buyback program which will allow investors to “repurchase up to $200 million” of company stock.
Companies initiate stock buybacks when they have cash on hand and when they feel the shares are undervalued in hopes it will reduce the number of outstanding shares — hence driving up demand while increasing the stock price.
Shares of Informatica, which are traded on the New York Stock Exchange, were down by more than 5% as of 2:30 p.m. Eastern time on Monday.
The Post has sought comment from Informatica.
A company spokesperson told SFGATE that the layoffs were a “difficult action” which sought to “align business efficiencies and focus on long-term success.”
The spokesperson said the company “remains confident in their leadership team.”
This story originally appeared on NYPost
