Intuit (INTU.US) laid off 10% of low-performing employees and increased AI investment.

Intuit Inc., the US tax software giant, will cut 1,800 jobs, replacing underperforming executives with new hires to focus on products that use artificial intelligence.

Sasan Goodarzi, the chief executive, said in a letter to employees on Wednesday that about 10% of the global workforce would be affected. He said the move was not about cost-cutting, and the company hoped to rehire the same number of employees, mainly in engineering, product and sales.

Goodarzi wrote that about 1,000 employees had “not met expectations”. The company will also cut the number of executives by about 10 per cent to speed up “decision-making”.

Since the beginning of 2023, technology companies have cut a record number of employees, shifting priorities and cutting staff more quickly. A slew of big-name companies, including Microsoft(MSFT.US), Google(GOOGL.US), Amazon(AMZN.US) and Salesforce(CRM.US), have cut staff in 2024. Intuit has so far avoided large-scale layoffs, despite its fame for its TurboTax and QuickBooks software.

Goodarzi wrote in the letter: “The changes we are making today allow us to invest more in our key areas to support our customers and drive growth.”

Goodarzi repeatedly stressed in the letter Intuit’s focus on generative artificial intelligence and the importance of its core group of small-business customers. The company will also seek more financial technology talent for its Credit Karma business, which oversees loans and helps users track their credit.

Kirk Materne, an analyst at Evercore ISI, said the hiring plans after the layoffs “indicate that Intuit remains optimistic about its growth prospects, particularly in its small-business and Credit Karma businesses”.

The company will close offices in Edmonton and Boise, Idaho, and consolidate some technical roles into larger hubs. It will also accelerate its expansion in Canada, Britain and Australia.

The company said in a filing with the US Securities and Exchange Commission on Wednesday that costs related to the layoffs would be between $250m and $260m, most of which would come from severance.