IT Consultancy Firm Thoughtworks Lays Off 500 Employees
The software consultancy specialist will cut 4 percent of its global workforce of 12,500 employees.
One month after acquiring Amazon Web Services consultant partner Itoc, Thoughtworks has confirmed it will be laying off around 500 employees on a global basis, joining the ongoing list of IT companies cutting hundreds or thousands of employees in 2023.
When contacted, the $1.3 billion Chicago-based company confirmed it made the “difficult decision” to reduce its global workforce of about 12,500 employees by approximately 4 percent.
“These changes were necessary to support the future growth of our business,” Thoughtworks said when asked about the layoffs.
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Thoughtworks, a software consultancy specialist, has employees spanning 18 countries including in the U.S., Europe, Asia and Latin America.
Thoughtworks shares dropped approximately 15 percent following the company’s fourth-quarter 2022 financial earnings report last week due to the company providing sales guidance for its current first quarter 2023 of around $304 million, which would reflect a 5 percent revenue drop year over year.
Thoughtworks shares are currently trading at $7.72 per share as of Monday morning.
IT Layoffs 2023
Thoughtworks joins the ever-growing list of IT companies laying off a large number of employees—ranging from startups to the biggest technology companies in the world.
In 2023 alone, Google announced 12,000 job cuts and Microsoft said it will lay off 10,000 employees, while even smaller startups like Rigetti Computing said it would cut 28 percent of its workforce.
Other notable IT layoffs rounds this year include from Dell Technologies, which will let go 6,500 employees on a worldwide basis; Salesforce, which will cut 7,000 employees; and Amazon, which is expected to let go of 18,000 employees this year.
Thoughtworks Acquires Itoc
Thoughtworks’ layoff confirmation comes after the company acquired AWS consulting partner Itoc in February, whose 70-person team joined Thoughtworks.
Itoc was the winner of the AWS 2021 Consulting Partner of the Year Award in Australia and has over 100 AWS certifications including in cybersecurity and Software as a Service. Thoughtworks recently achieved AWS Premier Tier Services Partner status, which is AWS’ highest partner tier.
Financial details of the deal were not disclosed.
First-Quarter 2023 Guidance
During its fourth-quarter 2022 financial earnings report last week, Thoughtworks said it generated $311 million in sales, an increase of 8 percent year over year.
For full-year 2022, the company reported $1.3 billion in total revenue, representing an increase of 21 percent compared with $1.07 billion in 2021. Thoughtworks reported an overall net loss of $105 million in 2022 compared with a net loss of $1 million in 2021.
Thoughtworks provided sales guidance for its current first quarter 2023 of between $303 million and $305 million, which would reflect a year-over-year sales decline of between 5 percent and 5.5 percent.
Thoughtworks currently has a market cap of $2.4 billion.