As Intuit Revamps Due To AI, Businesses Show Mixed Reactions

It’s no secret that artificial intelligence (AI) and generative artificial intelligence (GenAI) have greatly impacted how businesses operate.

In fact, this revolutionary technology is making many tech conglomerates realign and restructure their business strategies to cater to customers’ evolving demands and requirements.

In this regard, Intuit recently revealed some big internal revamps it plans to make, including a shakeup of how it runs its operations and workforce.

So, what did Intuit reveal about its restructuring plans? Let’s explore!
 

What Does Intuit’s Shift Towards AI Mean For The Company And Employees?

 

• According to a report by Fortune, Intuit plans to let go of 1,800 current employees, a figure that represents around 10% of its total workforce.

• The move comes as the company highlights a priority shift in business strategies towards a more AI and GenAI-focused approach.

• This includes a GenAI-powered financial assistant called Intuit Assist and other “traditional” products being refurbished to natively AI-based ones.

• Another motivating factor in the restructuring includes international growth, mid-market expansion for small businesses and the global movement of money, which is increasingly shifting towards AI.

• As per an internal email sent out to employees by Sasan Goodarzi, CEO of Intuit, the move comes from “very difficult decisions my leadership team and I have made.”

• However, the email further states that the move isn’t based on cost-cutting but rather due to low performance and unmatched expectations following a formal performance review, especially in the case of 1,050 workers.

• Ahead of this, the company plans to hire 1,800 new workers with skills and talent in fields such as engineering, product, sales, customer success and marketing.

• The CEO maintains that the company is expected to grow its overall headcount in the 2025 fiscal year.

 

What Did Intuit Say About The Move?

 

• Goodarzi explained that the departing employees would be “more successful outside of Intuit,” while adding, “We do not do layoffs to cut costs, and that remains true in this case.”

• At the same time, Intuit is removing 10% of high-level roles as well, including directors, SVPs and EVPs, a move that will see them expand certain executive roles and responsibilities.

• The company will also consolidate 80 tech roles to office locations that house its growing technology teams, which includes cities such as Atlanta, Bangalore, New York, Tel Aviv and Toronto.

• Intuit is also closing two offices in Edmonton and Boise, where some of the 250 employees will be relocated.

• US employees leaving will receive severance packages that include a minimum of 16 weeks of pay, two additional weeks for every year of service and have 60 days before leaving, with their last date set to September 9.

• Workers from outside the US will get similar benefits based on local requirements.

• “This timing allows everyone leaving to reach their July vesting date for restricted stock units and the July 31 eligibility date for annual IPI bonuses.”

 

How Else Has AI Reshaped Companies?

 

• On the workforce front, recently we reported on Adobe announcing a new hiring wave as it looks to empower its AI research team, in a bid to enhance its products and services while boosting its capabilities to serve customers and clients.

• As for AI infrastructure, the last few weeks have seen NVIDIA, a leader in GPU manufacturing, rise to claim the top spot among the most valuable companies by market capitalization.

• It even saw the company outshine tech giants Microsoft and Apple for a while, before settling in third spot with a market cap of 3.15 trillion (as of July 11).

• What’s impressive is that the company took 24 years to reach the $1 trillion mark (reached in May 2023), while the next trillion-dollar jump took only 270 days or roughly 9 months and the third trillion was hit in the beginning of June 2024.

• Furthermore, some experts believe that the company can reach a market cap of $6 trillion by the end of 2024.

• However, this phenomenon is not restricted to NVIDIA.

• Semiconductor manufacturers such as AMD, Intel and TSMC (Taiwan Semiconductor Manufacturing Company) also saw their valuations soar, with TSMC also reaching a trillion-dollar valuation just this week.

• TSMC was also the recipient of over $4.8 billion in funding from foreign investors.

• At the same time, hedge funds such as Man Group, FengHe Fund Management, CloudAlpha Capital Management and East Eagle Asset Management are looking to invest in other promising avenues, turning their attention to Asian countries, particularly South Korea.

• This includes pouring money into companies such as SK Hynix and Samsung Electronics, which haven’t been in the limelight as much.

• As per Matt Hu, CIO of $4 billion FengHe, who has been buying Hynix and Samsung, said, “If we consider Nvidia the king of the AI story, then Hynix is the queen.”

However, not all are impressed with the technology.
 

What Challenges Are Present In The AI Industry?

 

• According to James Ferguson, Founding Partner of the UK-based macroeconomic research firm MacroStrategy Partnership, investors of AI should be weary of the AI bubble that’s quite like the dot-com era.

• As per Ferguson, “AI still remains, I would argue, completely unproven. And fake it till you make it may work in Silicon Valley, but for the rest of us, I think once bitten twice shy may be more appropriate for AI. If AI cannot be trusted…then AI is effectively, in my mind, useless.”

• Ferguson expanded, “Forget NVIDIA charging more and more and more for its chips, you also have to pay more and more and more to run those chips on your servers. And therefore you end up with something that is very expensive and has yet to prove anywhere really, outside of some narrow applications, that it’s paying for this.”

• Furthermore, a study by Lucidworks of more than 2,500 leaders in AI decision-making worldwide, found that just over half of manufacturers plan to increase AI spending in 2024. This resulted in a drop from 93% in the previous year.

• “While many manufacturers see the potential benefits of generative AI, challenges such as response accuracy and cost are causing them to take a more cautious approach,” said Lucidworks Chief Executive Mike Sinoway.

Do you think more companies will follow in Intuit’s footsteps as they shift their strategies to reflect a more AI-focused approach? Do you think businesses should consider reducing their AI adoption until its concerns are addressed?

Let us know in the comments below!