DocuSign has announced it will lay off approximately 400 employees, equating to 6% of its workforce. The company stated in an SEC filing that the cuts are part of a “restructuring plan,” impacting primarily its sales and marketing teams and projected to cost between $28 and $32 million for severance payments, benefits, and related expenses.
This news emerges amid rumors that DocuSign was potentially being targeted for a $13 billion acquisition by Bain Capital and Hellman & Friedman. However, these discussions reportedly stalled due to disagreement over the fee, though a resumption of negotiations remains a possibility.
During the pandemic, DocuSign’s valuation surged, reaching a market capitalization of over $60 billion in 2021 due to the increased demand for remote solutions. However, as the conditions return to a semblance of normality, its valuation has dropped to around its pre-pandemic level of $10 billion.
This layoff is the latest in a series for the company in its bid to cut costs. DocuSign previously laid off 9% of its staff in late 2022, followed by a further 10% a few months afterwards. The company justifies these layoffs as measures to “strengthen and support its financial and operational efficiency,” expressing confidence that it will “meet or exceed” its financial guidance during its Q4 2023 earnings report next month.
In an internal email, DocuSign CEO Allan Thygesen explained that the company had to reduce operating costs, as revenue from its recent product updates and releases, such as a new WhatsApp integration, would “take time.” The company had also explored other methods for cost reduction, including cutting program spending, professional fees, and open roles considered non-critical.
