Artificial intelligence company UiPath Inc (NYSE:PATH) shares fell 7% after the robotic process automation specialist revealed plans to axe one in 10 staff members, a filing showed.
The company's business is about enabling corporations to automate repetitive tasks and streamline workflows through AI-powered digital robots.
UiPath will streamline itself by laying off around 420 people to help cut costs, with most of the reduction expected to occur by the end of the first fiscal quarter of 2026, which ends in April next year.
This is expected to result in $17-25 million of restructuring costs over the next seven fiscal quarters, a filing showed.
"This workforce reduction is aimed at further driving operational efficiency and customer centricity," the filing from UiPath explained.
The changes reflect the management team's effort to "reshape the organization by streamlining the Company’s structure, particularly in operational and corporate functions, better prioritizing our go-to-market investments and focusing our research and development investments on artificial intelligence and driving innovation across our platform".
In the first quarter of its current fiscal year, ending April 2024, UiPath cut its revenue guidance as it reported "increased deal scrutiny and lengthening sales cycles for large multi-year deals", which hit operating margins.
The company, which was founded in a tiny apartment in Romania in 2005 by Daniel Dines and Marius Tîrcă, a year ago today announced that Dines would move from CEO to the new position of chief innovation officer and his role would be taken by former Google Cloud executive Rob Enslin.
But alongside May's Q1 results this year, Enslin resigned from the board and Dines was re-appointed CEO, effective from June 1.