Is Intuit Falling Into The Same Mass Layoff Trap As Other Tech Companies? Or Is There Something Different At Work?

I was looking through some of my Article Stats earlier today, and I noticed that I had a 300% Increase in Readers.

As that is an anomaly, I looked into it and saw that it had to do with One Specific Article I wrote on April 27th, 2023.

In it, I wrote about the Merits of Intuit for Hiring and Growing during a period when Meta, Alphabet, Microsoft, and Amazon were going through Extreme Mass Layoffs due to Poor Leadership Decisions.

I found it strange that this article would suddenly Resurge in Popularity... until I looked at the Recent Tech News.

Intuit Announced that they were undergoing a Mass Layoff of 10% of its Workforce.

Truly Irony at its best.

But, is this just another case of a Large Tech Company making Poor Leadership Decisions where the Employees Pay the Price?

Or are we seeing a Different Layoff Approach from Intuit?

Before I dive too deeply into Intuit Specifically, I want to make something clear.

I believe that Mass Layoffs are a Sign of Leadership Blunders.

Now, do companies sometimes "have" to do it?

Unfortunately yes.

It shouldn't be that way, and there should be other avenues that Leaders Actively Pursue "Long" before Mass Layoffs Ensue.

But regardless, Mass Layoffs do point to Leadership Blunders and I still believe that to be the case with Intuit.

However, some specific nuances should be considered that actually make Intuit's Mass Layoff "Astronomically" Different from the "Standard" Mass Tech Layoff.

For instance, one of the Main Reasons most Tech Companies do Mass Layoffs is to do some "Accounting Trickery" to Quickly Reduce Costs so that their Books Appear Better to Investors.

Something that Struck Me as very Odd about Intuit's Statements around this Layoff though is that they are Essentially Laying off 1,800 Employees with the Goal of Hiring 1,800 Different Employees.

So they are Not truly Cutting Costs in this situation, as they are (at least "On Paper") appearing to be keeping a Similar Total Headcount.

This move then wouldn't really impact their Books at the end of the day, and depending on what roles they hire for could actually "Increase" their Costs.

This is likely what will happen as Intuit's CEO, Goodarzi, has been talking about how they plan to hire more people to Develop AI, which likely will have higher salaries than the Roles they Replaced.

So, already this appears to be a different type of Layoff, than something like Meta's Fake Work Layoff.

Another Oddity in this Layoff that I'm seeing is that it is not only Impacting the "Ground Level" Employees but is "Also" Impacting Executive Positions from the Director Level Up.

Generally in Mass Layoffs, you see the Focus is on the Lowest Rungs of Employees as the Higher Leaders are Covering their Rears for their own Mistakes and Blaming their Teams for the Problems at hand.

However, Intuit appears to be doing a 10% Layoff Across All Levels of the Organization.

10% of the Director Level Up are being Laid Off as well.

In this respect, it seems that arguably Intuit is attempting to do a more Equitable Layoff than most Tech Companies.

Then, it seems that Intuit is also including in this Layoff permanent Location, Team, and Role Closures.

According to Goodarzi's statements, they are streamlining their teams to focus on AI in the Locations where they are "...strategically growing our technology teams and capabilities..."

This statement also seems to align with their Goal to hire new employees for their AI Teams.

So, with these Nuances laid out, what are we actually seeing?

Well, there are a few possibilities, and we may be seeing multiple of these occurring, simultaneously.

I would still say this Is a Leadership Failure, but perhaps a more Tactical Recovery than most Tech Layoffs.

It is Difficult for Leaders to Always make the Correct Moves, as we are All Human and Will Make Mistakes.

But what are the Failures?

Well, it at least appears on the Surface that perhaps Intuit made a Mistake to keep certain Positions and Teams longer than was Beneficial.

Sometimes in Leadership, Ideas appear great on paper, but end up Not Working Out as Hoped.

We may be seeing that certain Teams and Locations were Maintained longer than Intuit "should" have until a Difficult Decision became Necessary to do a Layoff.

However, this may reveal Another Leadership Mistake in that these Employees were not given a chance to Upskill themselves and be given the decision to either Relocate to one of the offices being maintained or better be allowed to work Remotely.

As the continuing Failed Return-To-Office "Mandates" have been Revealing, Remote Work Innovation is actually Outpacing In-Office Innovation due to advances in Technology.

So not allowing these Employees to Upskill and Work Remotely would also be another Leadership Mistake.

However, this points to a Potential "Secret" Objective with this Layoff - It may be a Cover for Dismissing Remote Workers.

In my ongoing Research into these "Mandates", I have consistently found that one of the largest setbacks for Leaders is that they "can't" Enact them.

Dell just had 50% of their US Workforce Completely Ignore the Mandates.

Leaders can't afford to get rid of 50% of their Employees, even if only in one market, simultaneously.

Just ask Grindr which had 45% of its workforce simply Quit when they were "Mandated" to Return to Office.

But when it comes to Intuit, especially with the closure of specific locations and teams, it is possible they had an Insubordination Issue and decided to bite the bullet regardless...

Even if that Decision itself would be a Poor Leadership Decision.

At the other end of this spectrum, if Intuit "Truly" is only letting go of 10% of the lowest performers, as they are claiming, my question would be Why were they maintained this long?

If you "knew" they were not Performing, why would you keep so many of these Employees until it Burst?

This is a difficult question to answer as there could be many reasons, some of which even may be Positive.

It is possible that the Leaders "were" trying to help these 10% of Employees perform at higher levels, and it simply dragged on too long.

This is something that does occur to Good-Hearted Leaders frequently.

There is also a possibility that these Employees were maintained simply to deny them to competitors.

It is hard to know for sure from what I have access to see, but these are possibilities for different types of Leadership Failures.

However, there is one other possibility here with this Layoff that is much more direct and apparent.

Intuit wants to be the AI Category King/Queen in their Markets.

One thing that Goodarzi has been Blatantly Clear about since 2019 is that they believe AI is the next big Innovation.

I'm personally not convinced that AI is everything that most people try to make it seem, however in the case of Intuit I can see its Value.

AI's Strength is that it can sift through Static Data at Incredible Speeds and spit out what the Consensus is within that Data based on the Information it has.

Now, Intuit's primary products are Quickbooks, TurboTax, and Credit Karma on the Financial Side of things.

What are all of these Products?

Services that are designed to help people understand Complex Topics (Accounting, Taxes, and Credit Scores) which are all Dominated by Complex Rules and Trends.

These Complex Rules and Trends do Change, but usually they happen Slowly.

Helping people understand the Complex Rules and Trends that Impact them Specifically are things that I can see AI being very Beneficial in Aiding.

Now, one of the other Important things to understand here is that these Products are currently Category Kings/Queens in their Markets.

However, if the Industry goes through a Dramatic Change, new Categories can be Created that Destroy Older Categories.

Just look at how BestBuy was Destroyed by Netflix to understand.

I can see the Possibility that Goodarzi believes that the Industry he oversees will undergo a similar Category Change.

If I am correct, Goodarzi believes that the Future is AI Assisted Financial Services, and basically has been predicting it since 2019.

However, perhaps there is another Leadership Failure that we are seeing.

It's possible that Goodarzi saw the Trend before their competitors, but what they missed was how quickly AI would surge into Popularity and the Mainstream.

If so, then it would make sense why Intuit is making a more Drastic Change to AI with this Layoff.

Intuit's Competitors are now "All" in the AI game as well.

From this perspective, whoever wins the AI-Assisted Financial Services Race becomes the Category King/Queen.

According to the Research, Category King/Queen companies own 76% of their Markets on Average.

If this is true, then it is possible that Intuit's Category King/Queen Status could become Lost if their Competitors Beat them.

This would end up playing out very similarly to how Walmart lost its Status to Amazon when Online Shopping became the norm.

Amazon won the Online Shopping Category and Walmart has been unable to come close to Amazon since.

With everyone seeming to be nosediving into the AI game today, it may be that Goodarzi is trying to Cement its Category King/Queen Dominance in the next Industry.

If you look at it from this perspective, it becomes close to an "All-or-Nothing" Race, and it would be Imperative for Intuit to Win.

If Intuit Loses, they may stay "in the game", but their Dominance may Never Return.

This would also help explain why a Company that has for a long time avoided Mass Layoffs, suddenly is doing a 10% Layoff.

It may be a Necessary Move to remain a Dominant Force born from Leadership Oversight to see how Quickly AI would rise in Popularity.