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Sprinklr shares fall following workforce cuts, downgrade

Published 07/02/2025, 13:36
© Reuters.
CXM
2.61%

Investing.com -- Sprinklr Inc (NYSE:CXM) shares dropped 2.5% in pre-open trading Friday after the company announced a significant workforce reduction, which is expected to incur around $25 million in non-recurring charges. The company revealed on February 4, 2025, that it would cut approximately 15% of its global workforce as of January 31, 2025, in a move to realign costs and make room for capital to be invested in strategic areas such as go-to-market resources and R&D for its Service product.

The planned layoffs are part of a broader strategy to position Sprinklr for long-term success, as the company aims to shift its focus and resources toward growth and product development. The majority of the associated restructuring charges are anticipated to impact the first and second quarters of fiscal 2026, with the workforce reduction process expected to be substantially complete by the end of the third quarter of the same fiscal year.

In response to the announcement, William Blair analyst Arjun Bhatia downgraded Sprinklr’s stock from Outperform to Market Perform. Bhatia commented, "While expectations are low for the company at 3% consensus revenue growth in fiscal 2026 and the stock trading under 3 times revenue, we believe much of this year is likely to be a transition period for Sprinklr. This is partly highlighted by the news that the firm is laying off 15% of the workforce."

Investors seem to have taken a cautious stance on the news, leading to the stock’s decline in today’s trading session. The decision to reduce the workforce and the associated costs, along with the analyst’s downgrade, have contributed to the negative sentiment around the company’s stock. As Sprinklr navigates through this transition period, market watchers will be closely monitoring the company’s ability to balance cost reductions with strategic investments aimed at driving future growth.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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