A California-based company that offers identity management solutions to thousands of organizations stated on Thursday that it will lay off 400 people, or around 7% of its staff, by April.
Okta, with its headquarters in San Francisco, stated that the decision was reached following a business planning process that indicated the need for increased efficiency and profitability. Todd McKinnon, the company’s CEO, stated in a statement to staff that the layoffs were “difficult news” and offered severance payouts and job placement assistance to those impacted.
According to a WARN notification issued to the state Department of Employment Development, the layoffs would affect 83 workers who work in Okta’s First Street headquarters in San Francisco or remotely from California. The remainder of the layoffs will affect personnel outside of California, although the particular locations have not been published.
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Okta Faces Challenges Within the Cybersecurity Industry
Okta is a prominent provider of identity and access management solutions, enabling users to securely log in to a variety of online platforms and apps. The firm claims to have over 18,000 clients, including Adobe, JetBlue, Slack, and T-Mobile.
However, the firm confronts increased competition and expenses in the cybersecurity industry, which has expanded significantly as a result of the pandemic-induced shift to remote labor and online services. Okta competes with Microsoft, Google, and Ping Identity, as well as younger entrants like Auth0, which Okta purchased for $6.5 billion last year.
Okta’s sales increased 21% year on year to $584 million in the third quarter of fiscal year 2023, which ended October 31, 2022. However, the corporation recorded a net loss of $105 million, compared to $77 million at the same time last year. The firm plans to disclose its fourth-quarter earnings on February 28, 2023.
Okta’s Layoffs Follow a Trend in the It Industry
Okta is not the only IT business that has implemented layoffs in recent months. According to Layoffs. fyi, a website that analyzes job cutbacks across industries, more than 171,000 tech professionals were put off in 2023, following 164,000 layoffs in 2022.
Some of the digital titans that have announced large layoffs include Meta, which aims to lose 10,000 positions by the end of 2023; IBM, which laid off thousands of employees in January; and Amazon, which lost 3,000 jobs in its consumer business in November.
The layoffs reflect the evolving dynamics and problems of the technology sector, which has been impacted by the global economic slump, the war in Ukraine, supply chain interruptions, regulatory constraints, and changed customer preferences.
Final Words
Okta’s decision to lay off 400 people, or 7% of the staff, originates from a strategic desire to boost efficiency and profitability. Despite being a major identity management solution provider with over 18,000 clients, Okta is facing increased competition and escalating expenses in the cybersecurity business.
The layoffs are consistent with general trends in the tech sector, with over 171,000 tech personnel laid off in 2023, highlighting industry struggles amidst global economic uncertainty and dynamic change.