DocuSign Inc. today announced plans to let go about 400 employees, or 6% of its workforce, in a bid to cut costs and redirect more resources to growth initiatives.

The electronic signature provider detailed in a regulatory filing that the layoffs will mainly affect its sales and marketing teams. According to DocuSign, those employees in the U.S. will receive at least 12 weeks of severance pay. The company also plans to provide healthcare benefits, accelerated stock vesting and outplacement support.

San Francisco-based DocuSign is a major provider of electronic signature software that counts more than 1 billion users worldwide. It also sells other products, including cloud services for managing contracts and creating online forms. DocuSign generated $700.4 million in revenue across its product portfolio last quarter, up 9% from a year earlier.

In November, the company introduced a new WhatsApp integration for its flagship electronic signature service. The integration makes it possible to send WhatsApp users a notification with a link to a document awaiting signature. Around the same time, DocuSign obtained a cybersecurity authorization that will make it easier for state and local governments to purchase its cloud services.

In an internal memo announcing today’s job cuts, DocuSign Chief Executive Officer Allan Thygesen wrote that “it will take time for our new products to make a material impact on key metrics including bookings, billings, and revenue. This reality makes it critical for us to manage our business to improve profitability and focus investment on initiatives that provide the strongest foundation for long-term growth.”

The job cuts mark the third round of layoffs DocuSign has announced in 18 months. The company let go about 700 employees, or 10% of its workforce, last February. It earlier made a round of job cuts in September 2022 that affected 9% of its workers at the time.

DocuSign said that the latest job cuts will support its “multi-year growth aspirations as an independent public company.” Recent reports indicate that the Nasdaq-listed software maker has received takeover interest from private equity firms. This week, however, sources told Reuters that the acquisition talks have stalled, which raises the possibility DocuSign will continue operating as an independent public company for the foreseeable future.

Reports that the software maker could be acquired first emerged in December. That month, the Wall Street Journal reported the potential deal would be structured as a leveraged buyout. Last month, sources told Reuters that Bain Capital and Hellman & Friedman are “among the final bidders” competing to buy the company.

A newer Reuters report published on Monday indicates that DccuSign’s acquisition talks with the two private firms have stalled. The development is believed to be the result of disagreements over the sale price. There’s reportedly still a possibility that the acquisition talks will resume.

If a deal materializes, it could mark one of the year’s largest tech acquisitions. DocuSign has a market capitalization of more than $10.5 billion and any potential acquisition would likely close at an even higher valuation. 

Photo: DocuSign