Okta to lay off 7.0% of its employees

Okta Inc (NASDAQ: OKTA) is in focus this morning after announcing plans of lowering its headcount by about 7.0%.

How many employees will be laid off

The cybersecurity company will lay off some 400 of its employees in total as “costs are still too high”.

Okta has to be more “thoughtful about where we place our bets” for long-term success, Todd McKinnon – its chief executive said in a message to his staff on Thursday.

The news arrives only days after Microsoft Corp said it will cut 9.0% of the jobs in its gaming division as Invezz reported here. UPS also announced a rather sizable layoff earlier this week.

Okta is scheduled to report its financial results for the fourth quarter next month. Consensus is for it to lose 49 cents a share versus 70 cents per share a year ago.

Okta forecasts a restructuring charge in Q4

Okta Inc expects the restructuring to result in a $24 million charge in the fourth quarter. CEO Todd McKinnon also said in his memo to employees on Thursday:

Impacted employees in U.S. will receive transition support that includes time on payroll, cash severance, healthcare coverage, job placement resources, and support for anyone on a company-sponsored visa.

Note that tech companies laid off a total of 24,000 employees in January. Also today, Okta Inc reiterated its guidance for the fourth quarter and full financial year.

Wall Street currently has a consensus “overweight” rating on $OKTA that is now up more than 25% versus its low in late October.