Shares of DocuSign Inc (NASDAQ: DOCU) are trading up on Thursday after the eSignature company said it will lay off about 10% of its employees by the end of Q2.
The said layoff will affect roughly 700 employees and result in up to $35 million of impairment in its first financial quarter.
DocuSign expects the job cut to help on multiple fronts, including growth, scale and profitability. Speaking with CNBC this morning, the company’s spokesperson said:
The restructuring mainly impacts our worldwide field organisation. This action allows us to reshape the company to more effectively position us for profitable growth, while freeing up resources for investments.
The Nasdaq-listed firm is expected to earn 4 cents a share in its current quarter. A year ago, it was in 11 cents a share of loss. DocuSign stock is up nearly 20% for the year at writing.
It’s noteworthy that DocuSign had already trimmed its workforce by 9.0% last September.
Today’s announcement arrives only days after BlackRock revealed to have loaded up on another 1.8 million shares of the California-based company. The asset manager now has a 6.7% stake in DocuSign.
Others that have recently increased exposure to this pandemic darling include Westpac Banking Corp, KLK Capital, and Rheos Capital.
In January, Jefferies recommended that investors buy DocuSign stock as it had upside to $70 a share. Compared to where it’s currently trading, that price target represents another 5.0% upside from here. So, the sentiment overall seems to be improving for this name.
The post DocuSign to lay off employees again: a reason to buy stock? appeared first on Invezz.