Bay Area tech CEO boasts about growth, says he’ll lay off 545 workers

Informatica had a good third quarter, according to CEO Amit Walia’s comments in a press release last week. It was a “strong step forward,” he wrote, with the period “exceeding guidance for the top and bottom line.”

Also, he said, the Bay Area software company will lay off 545 people.

The layoffs include 90 workers from the company’s headquarters in Redwood City, according to a notice filed with the city government under California’s Worker Adjustment and Retraining Notification Act and obtained by SFGATE. The employees will lose their jobs on Dec. 31, the notice says.

Informatica chose to announce the layoffs alongside a successful quarter’s earnings, placing the announcement of the 10% workforce cut after more than a dozen bullet points about improving revenues and customer counts. The firm has been changing its business plan to rely more on how much customers use its data management services, as opposed to how many of them buy software licenses.

“We’ve already seen significant benefits of these initiatives undertaken throughout this year, including the strong momentum and execution reflected in today’s earnings results,” Walia wrote in the “Restructuring Plan” section of Wednesday’s release. “Our next phase of growth allows us to further streamline our global cost structure without reducing our growth expectations.”

“Streamline our global cost structure” is one of the corporate codes — popular among tech companies in 2023 — for laying off workers. “We have strong momentum heading into the fourth quarter,” Walia continued. The company’s board also authorized a $200 million share buyback, the release says, a common sign of financial stability.

The press release outlined the company’s financial trade-offs from laying off hundreds of workers and cutting its real estate holdings. Informatica estimates it will save $84 million in fiscal 2024 once the cuts are complete, but in the short term, the company expects to have to shell out $35 million to $45 million for severance payments, real estate charges and other costs.

Informatica spokesperson Chiku Somaiya, in a statement to SFGATE, called the layoff a “difficult action” aimed to “align business efficiences and focus on long-term success,” and added that the firm “remains confident in their leadership team.”

This story has been updated to include comment from Informatica.

Hear of anything happening at Informatica or another tech company? Contact tech reporter Stephen Council securely at [email protected] or on Signal at 628-204-5452.