OpenText plans to lay off 1,200 staff

But hopes to create 800 new roles in sales, professional services and engineering

OpenText, a supplier of a wide range of cybersecurity, AI and other IT management solutions for MSPs, plans to lay off 1,200 employees and add 800 positions as part of a "business optimisation plan" to support its "growth and innovation plans," according to a 3rd July filing with the US Securities and Exchange Commission (SEC).

Overall, the business optimisation plan, which is intended to strategically align the company's workforce, is expected to result in a 1.7% reduction of its workforce to approximately 23,000 employees.

The business optimisation plan also is expected to result in annualised cost savings of approximately $200 million for the $4.5 billion MSP software behemoth.

At the same time, the company is reinvesting approximately $50 million annually for approximately 800 new roles in sales, professional services and engineering.

In an email to CRN, an OpenText spokesperson said that the "Business optimisation plan focuses on placing the right roles in global locations most appropriate for the business."

The Ontario, Canada-based company said it expects to complete the plan during the first quarter of its Fiscal Year 2025, which began on 1st July.

OpenText said it will incur about $60 million in restructuring charges that will be "substantially recognised" in the first quarter of Fiscal Year 2025, with the majority of the charges anticipated to be paid in cash during the same quarter, according to the filing.

When fully implemented, the software company expects that the plan will result in net savings of about $150 million in Fiscal Year 2025 and plans to provide additional details as part of its fourth-quarter and 2024 fiscal year-end results, according to the filing.

In the most recent quarter ended March 31, OpenText reported GAAP-based diluted earnings per share of 36 cents, up from 21 cents per share in the year-ago quarter, on a 16% increase in sales to $1.44 billion.

Among the companies OpenText has acquired as it has built out its comprehensive information management software portfolio are Micro Focus, Zix and Carbonite.

In May, OpenText acquired the Pillr managed detection and response platform from cybersecurity IT services firm Novacoast.

Pillr's MSSP-focused technology combined with OpenText's expertise "provides enhanced threat hunting, monitoring and response for customers where skill gaps, skill shortages and alert fatigue create a significant need today," according to a press release about the acquisition.

OpenText shares closed up 46 cents, or 1.5%, to $31.10 on Wednesday.

This article first appeared on CRN