Intuit beat expectations across nearly every major metric in its third quarter. But the company also announced it was cutting roughly 17% of its workforce.
For the quarter ended April 30, the maker of TurboTax, QuickBooks, Credit Karma, and Mailchimp grew total revenue 10% to $8.6 billion and non-GAAP diluted earnings per share 10% to $12.80, topping the high end of its own guidance and Wall Street consensus. The company also raised its full-year outlook above the prior top end of guidance on the top line and every non-GAAP metric.
Even GAAP results would have cleared consensus and the top end of guidance “if it wasn’t for the restructuring charge we took,” CFO Sandeep Aujla told me.
Along with earnings, the company announced Wednesday that it would cut approximately 3,000 jobs from its 18,200-person global workforce and wind down offices in Reno, Nev., and Woodland Hills, Calif. It follows a roughly 1,800-person reduction in 2024 that was also framed around an AI reset.
Intuit Chairman and CEO Sasan Goodarzi told employees in a memo that the company is focusing on three big bets: scaling its AI-native platform, becoming the center of money for consumers and businesses, and winning the mid-market.
“We believe we can serve more customers and deliver breakthrough products that fuel our customers’ success by reducing complexity and simplifying our structure to become a faster, leaner, and more focused company,” Goodarzi said, adding that “saying goodbye is never easy, and I want to acknowledge the weight this news carries for all of us.”
In my conversation with Aujla, he also reiterated the difficulty in making these decisions. “Our hearts are definitely with our employees, and we’re making sure they’re well taken care of through this transition period.” Affected U.S. employees will receive 16 weeks of base pay plus two additional weeks for every year of service, with a final employment date of July 31.
The rationale, Aujla said, is to push Intuit to “operate more like builders who are entrepreneurs.” He distilled it into three traits: “focused organization, flatter organization, a faster organization.”
I asked him whether “builders who are entrepreneurs” referred to specific skill sets. Aujla said it was less about skills than mindset. “Velocity is so critical,” he said. “We’ve got to move faster, we’ve got to be more focused, we’ve got to have fewer layers of management. That’s how more entrepreneur companies tend to operate.” He framed the move as consistent with the company’s 40-year history of taking what he called a “day-one mindset”—periodically asking whether the company is structured for the next decade.
The cuts span seniority levels rather than targeting middle managers alone. “We looked at layers of management, definitely across all layers, not just middle management,” he said. Intuit also looked at roles primarily focused on coordinating between teams, such as project management and business operations—work he said is valuable but increasingly redundant in a flatter org. “We want more of the principal-to-principal discussions and debate … we need less of the coordination organization.”
The intent behind the decisions, he said, is to “set up the company for the decade ahead and to move at the utmost velocity.”
A ‘tale of two cities’ in tax
Aujla called this year’s tax season “a tale of two cities.” IRS filings came in weaker than expected, but Intuit’s assisted-tax business outperformed, with assisted customers up 38% and assisted revenue up 36%.
The weaker area was DIY filers earning under $50,000, a group Aujla described as highly price-sensitive. Intuit is evaluating pricing and adjacent services such as Credit Karma and refund-related offerings to better monetize that customer base.
Leaning into buybacks
Intuit repurchased $1.6 billion of stock in Q3 and raised its dividend 15%, even as investors worry AI agents could disrupt traditional SaaS models.
“We’re leaning into buybacks because we think the stock is mispriced,” Aujla said.
Sheryl [email protected]
This story was originally featured on Fortune.com
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