E-signature company DocuSign laid off 6% of its workforce, or about 400 employees, following reports that the fintech company’s talks in exploring a sale have stalled.
A majority of the impacted positions came from the company’s sales and marketing organizations, the company said. DocuSign had 7,336 employees at the end of 2023.
DocuSign began to cut operating costs for fiscal year 2025, including areas such as program spending, professional fees and noncritical open roles, according to a message that CEO Allan Thygesen shared with employees on Tuesday.
Layoffs came as the San Francisco-based fintech concluded that further action was needed in addition to ongoing cuts to overhead costs, according to the company’s announcement.
Earlier this week, Reuters reported that DocuSign’s deal talks with Bain Capital and Hellman & Friedman stalled over disagreements on the acquisition price.
Bloomberg also reported that several banks, including JPMorgan Chase & Co. and Bank of America Corp., have held talks to provide as much as $8 billion to finance a buyout of DocuSign.
As a result of the layoffs, the company will incur about $28 million to $32 million in nonrecurring charges in connection with its restructuring plan. These consist primarily of cash expenditures for employee transition, notice period and severance payments, employee benefits and related costs.
U.S.-based employees will remain on payroll until at least March 1 and will be eligible for a minimum 12 weeks of severance pay. Impacted staff will also receive a lump sum for health care, equivalent to a minimum of three months of COBRA premiums.
Founded in 2003 by Tom Gonser, DocuSign went public in 2018 and was valued at about $6 billion at the time. DocuSign’s market capitalization is close to $10.5 billion with a share price of $51.33 as of Thursday afternoon.
While the company thrived during the COVID-19 pandemic as remote work fueled demand for virtual signing of deals, mortgage papers and other documents, demand for technology eased due to a combination of return-to-office policies and rising inflation.
The company was also hurt by increased competition from Adobe Inc’s document business as investors lost appetite for DocuSign’s unprofitable software stocks.