Shares of Okta Inc.
surged 6.5% in premarket trading Thursday, after the provider of identity management software for businesses said it would lay off about 300 employees as part of a cost-cutting plan. With 6,037 employees as of Oct. 31, the job cuts would reduce Okta’s workforce by about 5%. The company said it will recognize a restructuring charge of about $15 million for severance and benefits costs, which will primarily be paid out in the first quarter of fiscal 2024, which ends in April. “We entered fiscal 2023 with a growth plan based on the demand we experienced in the prior year. This led us to overhire for the macroeconomic reality we’re in today. In addition, in the first half of FY23, we faced our own execution challenges. I wish I had responded sooner, but we’re doing the best we can today to adjust to this reality,” Chief Executive Todd McKinnon said in a letter to employees. The stock has soared 49.5% over the past three months through Wednesday, while the S&P 500
has gained 9.6%.