Okta to Lay Off 5% of Staff After Pandemic Hiring Spree

“This led us to overhire for the macroeconomic reality we’re in today,“ Mr. McKinnon said. He added that the company faced execution challenges in fiscal 2023, which began in February 2022. “I wish I had responded sooner, but we’re doing the best we can today to adjust to this reality.”

In recent weeks, more companies across tech and other sectors have joined a round of layoffs that was led by some of the largest tech companies, including

Microsoft Corp.

and Amazon.com Inc., around the start of the year. This week,

FedEx Corp.

said it is laying off more than 10% of its global management staffers as it confronts a shipping slowdown. Other companies, including

3M Co.

,

Dow Inc.

and

Hasbro Inc.,

have recently moved to cut jobs, too.

Okta went on a hiring spree during the Covid-19 pandemic, as demand for its identity-verification software surged. As of Jan. 31, 2022, Okta had 5,030 employees, up from 2,248 at the same time in 2020, according to regulatory filings.

Going forward, Mr. McKinnon said, the company would reduce spending and improve profitability. The company expects to book a $15 million restructuring charge in the fiscal fourth quarter tied to the layoffs.

Shares of Okta rose more than 6% to $81.04 a share in premarket trading. Over the past 12 months, the stock is down nearly 60%.

Write to Will Feuer at [email protected]