Open Text to cut 1,200 jobs as part of cost-saving plan

By Tomi Kilgore

Business-software company to cut workforce by just under 2% to about 23,000

Shares of Open Text Corp. rallied Wednesday after the enterprise-software company disclosed that it was cutting 1,200 jobs as part of a "business optimization" plan aimed at saving about $200 million a year.

The Canada-based company said it expects to book $60 million in restructuring charges, which will be "substantially" recognized in the fiscal first quarter of 2025, which runs through Sept. 30.

The stock (OTEX) (CA:OTEX) rose 1.4% in morning trading. It has run up 12.2% since it closed at an 18-month low of $27.70 on June 7.

The company added that the optimization plan also included reinvesting $50 million a year for about 800 new positions in its sales, professional services and engineering segments.

In total, the company expects the plan to result in a 1.7% reduction in its workforce, to about 23,000 employees.

Open Text, which has a market capitalization of $8.48 billion at current stock prices, said it would provide additional details of its business-optimization plan when it reports fiscal fourth-quarter results, which are expected to be released in early August.

The stock has tumbled 26% year to date, while the SPDR S&P Software & Services ETF XSW has tacked on 1.4% and the S&P 500 index has rallied 15.7%.

-Tomi Kilgore

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07-03-24 1032ET

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