Sprinklr has confirmed plans to lay off 15 percent of its workforce, amounting to approximately 500 employees.
The CX management platform provider cited poor business performance as the reason for the cuts.
Although details on which areas/roles will be impacted have not been released, a Sprinklr spokesperson told TechCrunch that C-level positions will be unaffected.
The latest layoffs follow two previous workforce reductions – three percent in May 2024 and four percent earlier in 2023 – which affected around 200 employees in total.
Interestingly, despite these considerable cuts, the company did confirm that it will “continue to hire in prioritized areas” in order to focus on its “strategic priorities.”
Indeed, the spokesperson implied that the releases were part of a company restructuring, stating:
We will refocus and rebalance our investments, talent, and resources in order to better serve our customers and partners and help them realize the full value of our AI-powered platform.
The vendor also emphasized that it intended to “support departing teammates with the greatest care and respect, acknowledging their contributions to Sprinklr, and assisting them in their transition.”
Why Now?
Sprinklr’s reference to its business performance not meeting its expectations has been reflected in the company’s share price in recent times.
The stock currently sits at $8.88, which is 28.96 percent down from the same point last year.
This issue was reflected in the company’s Q3 earnings call, where, despite posting solid year-over-year figures for total revenue (8%) and subscription revenue (6%), there were notable struggles.
GAAP operating income dropped to $7.9 million from $13.2 million last year and non-GAAP operating income decreased to $23.3 million from $27.4 million.
GAAP operating margin also dropped to four percent, down from seven percent in the same period last year, while non-GAAP operating margin was 12 percent, compared to 15 percent in Q3 of fiscal year 2024.
Away from the figures, the vendor has been undergoing a reshuffle at board and executive level, with Jan Hauser (former PwC Partner) and Stephen Ward (ex-CEO of Lenovo) recently being appointed to its board as part of the push toward AI-led experiences.
Prior to this, the company named Rory Read as its new CEO and President.
It could be argued that the recent changes in senior leadership positions are linked to the staff cuts.
This point appeared to be made by CX consultant, Eugene Liu, who intimated that the reshuffle may have impacted the layoffs:
“Several CX companies have offered statements that named 2025 as the year for growth.
“Unfortunately, as layoffs continue to occur in the sector, it appears growth may come from sacrificing headcount first.”
Outside of performance shortcomings, another reason for the layoffs could be a change in business strategy.
In comments made prior to the cuts at Sprinklr’s quarterly industry analyst update, Read admitted that Sprinklr had “spread itself too thin” by pursuing too many market opportunities.
To combat this, the CEO explained how he is now focusing the company’s efforts on the Rule of 40, with an emphasis on execution discipline.
This concept was also mentioned during the earnings call, where Read said:
Financially, our overarching goal is to become a Rule of 40 company. Today, we’re operating below 20% on the Rule of 40. This is simply not acceptable.
“We intend to reach this goal through a combination of faster top-line growth and substantial operating margin expansion.”
A Wider Trend?
The news follows a similar ‘fire and hire’ strategy reportedly being deployed by Salesforce.
Earlier this week, Bloomberg claimed that Salesforce is cutting over 1,000 jobs.
The news agency cited a source close to the matter who could not confirm which specific divisions will be impacted, but did advise that affected employees may apply for internal roles.
Notably, like Sprinklr, the cuts occur at the same time that Salesforce is looking to hire 2,000 people to support its new AI solution, Agentforce.
More News from Sprinklr
Late last year, EE confirmed that it had adopted Sprinklr Unified-CXM across its customer experience operations, integrating solutions for contact centers, marketing, social, and insights, along with a conversational AI platform.
Since implementing the AI, EE has upgraded its virtual agent, “Aimee,” which now handles 60,000 customer conversations weekly, double the 30,000 it automated two years ago.
Elsewhere, Sprinklr recently unveiled 70 new capabilities in an update to the Sprinklr Service CCaaS platform, focusing on knowledge, workforce, and case management.
AI improvements are also featured, including upgrades to the Digital Twin module, which automates customer interactions and acts as a copilot to assist employees across various departments.
