Intuit Cuts Workforce and Lowers Revenue Forecast Amid AI Disruption Fears

Intuit, the tax and accounting software provider, announced on Wednesday that it will reduce its full-time workforce by 17%, resulting in the elimination of nearly 3,000 roles globally. This move is expected to help simplify the company's organizational structure and focus on key areas, including AI efforts.

The restructuring charges tied to the job cuts are estimated to be between $300 million and $340 million, which will be recognized in the fourth quarter. At the time of its annual report in July last year, Intuit had approximately 18,200 employees across seven countries.

The company's decision to cut its workforce comes as investor worries over the potential disruption of its tax business by generative AI continue to weigh heavily on its stock. The stock has fallen by 42% so far this year, amid concerns that general-purpose large language models can replicate TurboTax's premium tax guidance capabilities without proprietary financial data.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

TurboTax Revenue Forecast Lowered

Intuit has lowered its annual revenue forecast for TurboTax to a range of $5.277 billion to $5.282 billion, down from its prior projection of $5.305 billion to $5.330 billion.

The company's fiscal 2026 TurboTax revenues are expected to be at the lower end of its revised forecast, due in part to a projected drop in total Internal Revenue Service tax filings. According to CEO Sasan Goodarzi, total Internal Revenue Service tax filings are projected to drop nearly 30 basis points this season, roughly 2 million short of broader economic forecasts.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Pricing Actions and AI Partnerships

Intuit plans to "take pricing actions at the higher end" of its portfolio, while expanding its platform set for August. The company has also announced an expansion of its AI partnerships, including a multi-year deal with Anthropic. These partnerships are central to Intuit's strategy of embedding AI tools across its platforms and expanding its tax, finance, and accounting capabilities.

Q2 Revenue and Earnings

Intuit reported revenue of $8.56 billion for the February-April quarter, falling short of analysts' average estimate of $8.61 billion. However, the company's quarterly adjusted profit came in at $12.80 per share, compared with estimates of $12.57.

Annual Revenue Forecast Update

Intuit has updated its annual revenue forecast to a range of $21.34 billion to $21.37 billion, up from its previous projection of $21 billion to $21.19 billion.