: Okta CEO says layoffs were ‘the last thing I wanted to do’ as company cuts 300 jobs

The wave of software layoffs continued Thursday as Okta Inc. announced that it was cutting 300 jobs.

Chief Executive Todd McKinnon disclosed the layoffs, which will affect about 5% of Okta’s

employees, in an email to staffers Thursday that was also posted to the company’s corporate blog.

“A workforce reduction like this is the last thing I wanted to do, and I am truly sorry,” he said in the note.

McKinnon wrote that Okta’s cuts come after the company grew too quickly in light of current economic circumstances. He said it also made some execution missteps.

Don’t miss: More than 82,000 tech-sector employees have lost their jobs since the start of the year

“We entered fiscal 2023 with a growth plan based on the demand we experienced in the prior year,” he said. “This led us to overhire for the macroeconomic reality we’re in today. In addition, in the first half of [fiscal 2023], we faced our own execution challenges.”

In a filing with the Securities and Exchange Commission, the company disclosed that it expects to take about $15 million of restructuring charges in its 2023 fiscal fourth quarter for payments expected to be made in the fiscal first quarter of 2024.

Workday Inc.

and Splunk Inc.

are among other software companies that announced layoffs this week, while SAP

and Salesforce Inc.

have also moved to reduce their employee counts. Layoffs have affected workers in other categories of tech as well, and even the biggest companies haven’t been immune from cutbacks.

See more: Splunk to lay off 4% of its staff in latest sign of software cutbacks

Shares of Okta were ahead more than 6% in morning trading.

Read: Tech layoffs may be continuing, but these skills are still in high demand

The stock’s gains also come after Needham analyst Alex Henderson turned bullish on the name.

Henderson thinks that Okta has “righted” problems with execution that led to what he deems a conservative forecast for fiscal 2024.

“We think the growth bar set at 16%-17% in [fiscal year 2024/calendar year 2023] is easily beatable as it was set before evidence of the fixes kicked in,” he wrote in a note to clients ahead of the layoff announcement, as he upgraded the stock to buy from hold and set a $90 price target. “The Customer business alone, at ~45% of revenue and growing 30%-35%+, should be able to drive company-wide revenue to meet the [calendar year 2023/fiscal year 2024] guidance, we believe.”

Henderson joins Stifel analyst Adam Borg, who upgraded Okta’s stock to buy from hold earlier in the week.

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