UiPath (PATH) on Tuesday said it would cut 10% of its workforce, about 420 employees, as part of a restructuring plan expected to cost in a range of $17 million to $25 million. UiPath stock fell on the news.
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Further, UiPath stock plunged May 30 on lowered fiscal 2025 guidance. The company said its Chief Executive Rob Enslin was resigning, with founder Daniel Dines returning as CEO.
The restructuring “marks the first announced change since founder Dines retook the reins as CEO,” said TD Cowen analyst Bryan Bergin in a report. “We expect a mixed read on the actions as investors balance its greater focus on cost optimization/streamlining versus near-term execution risks.”
UiPath Stock: RPA Market
On the stock market today, UiPath stock fell 6.6% to near 12 in midday trading. Also, shares were down 48% in 2024 as of Monday’s market close.
Meanwhile, UiPath competes in the robotic process automation, or RPA, market. RPA software companies provide tools that program robotic software to automate human tasks. The bots function best suited for manual, high volume, repetitive tasks in back-office operations — typically automating accounting, billing and customer service.
Analyst Views On Restructuring
“We believe this (restructuring), while unfortunate, could help reshape the organization and go-to-market motion after the company significantly reduced its growth outlook last quarter,” said Jake Roberge, a William Blair analyst in a report.
“We believe this announcement is reflective of UiPath’s aim to drive more operational efficiency while maintaining top-line growth.”
At Truist Securities, analyst Terry Tillman said in a report: “Macro challenges and go-to-market issues drove the company’s recent Q1 results. These changes in addition to the restructuring plan could be disruptive and take longer to play out in reaccelerating growth and strengthening net new annual recurring revenue performance.”
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
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