Intuit Plans to Lay Off 1,800 People and Hire New Talent with Focus on AI
Intuit is laying off 10% of its workforce while planning to replace them with AI-skilled talent. Find out the implications of such a move for companies like Intuit looking to accelerate their AI ambitions.
- Intuit is laying off 1,800 employees. At the same time, it plans to hire a significant number of people in data science, product development, engineering, and customer-facing roles, with an emphasis on AI expertise.
- Would reskilling and upskilling its workforce instead of firing employees and hiring new talent be a better option for Intuit?
On Wednesday, Intuit’s CEO, Sasan Goodarzi, announced in an internal letter that the company would be laying off 1,800 employees, i.e., 10% of the total workforce. Simultaneously, it plans to hire the same number of new employees as part of its restructuring efforts purportedly focused on artificial intelligence (AI).
Goodarzi clarified that the company is in a position of strength and that the layoffs were not a cost-cutting exercise. However, the move allowed the company to allocate additional investments to its most critical areas to support its customers and drive growth.
Intuit’s layoffs affected various departments and led to the closing of offices in Edmonton, Canada, and Idaho, impacting over 250 employees. About 300 roles were eliminated throughout the company to “streamline operations” and move resources toward AI. Several other employees lost their jobs for other reasons.
See more: Creating a Resilient Talent Ecosystem in the Reskilling Era
Upskilling and Reskilling a Possible Alternative?
While Intuit will be laying off 1,800 people, it plans to step up its investments in its AI-based financial assistant, Intuit Assist, which is expected to provide AI-generated financial recommendations. Goodarzi’s message indicates that the company intends to hire a significant number of people in data science, product development, engineering, and customer-facing roles, especially with AI expertise. This raises the question of whether firing people and hiring new talent with AI expertise was the only way to advance the company’s AI ambitions or if the company could have looked at upskilling and reskilling its employees.
In his internal letter and blog post, Goodarzi said, “..AI is igniting global innovation at an incredible pace, transforming every industry and company in ways that were unimaginable just a few years ago. Companies that aren’t prepared to take advantage of this AI revolution will fall behind and, over time, will no longer exist.” Several studies support this claim. For example, according to the World Economic Forum’s global Future of Jobs report released in 2023, nearly 75% of the surveyed companies are expected to adopt AI. This would also lead to a high churn.
That said, a few studies found that upskilling and reskilling are imperative in this scenario. For example, the BCG Henderson Institute and the Digital Data Design Institute at Harvard’s Digital Reskilling Lab published a report last year. One key insight was that reskilling is an imperative, not an option. The researchers further wrote, “It should be a response to new tasks or company-specific needs, not a way to soften the blow of layoffs, assuage feelings of guilt about social responsibility and create a positive PR narrative”. The same study also found that only 24% of companies directly link reskilling efforts and corporate strategy.
A few other studies show that many employees can be reskilled and contribute significantly to an organization’s AI ambitions. For example, The State of AI in 2023 report by McKinsey found that most companies adopting AI expect a little over 20% of the workforce to be reskilled. Companies classified as “AI high performers” were more likely to reskill over 30% of their employees in the next three years.
Some companies are already taking steps in this direction. For example, Ericsson has upskilled over 15,000 people in automation and AI in three years. Organizations like McDonald’s, Mahindra & Mahindra, and Wipro have reskilling pathways built into their tools, policies, and IT platforms. Many companies have committed massive amounts of money to their upskilling programs. For example, Verizon has committed $44 million, PwC has committed $3 billion to upskill all its employees, and Accenture has said it will spend nearly $1 billion yearly to retrain its workers.
Takeaway
As companies race to leverage new technologies and technological advancements to transform themselves and offer customers enhanced offerings, more employees are becoming victims and losing their jobs. However, this need not be the case, as companies have a better alternative—reskilling and upskilling their employees. With a shortage of the right AI talent in the market and hiring new talent being an expensive affair, reskilled employees can contribute to the organization’s success in a fast-changing business landscape.
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