UPDATED 19:08 EDT / APRIL 30 2025

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OpenText expands restructuring initiative after larger-than-expected sales drop

OpenText Corp. will cut 1,200 roles as part of a restructuring initiative designed to lower its annual expenses by up to $550 million.

The software maker announced the plan today in conjunction with the release of its third quarter earnings report. OpenText ended the three months ended March 31 with sales of $1.254 billion, down from $1.44 billion a year earlier. The consensus analyst estimate projected $1.28 billion.

OpenText attributed about two-thirds of the revenue drop to the sale of its AMC business unit last year. The unit, which developed software for managing mainframe applications, was acquired by Rocket Software Inc. in a $2.275 billion deal. OpenText used most of the proceeds to pay down debt.

Waterloo, Canada-based OpenText launched more than 30 years ago as a dictionary digitization project at a local university. The software maker spun off in 1991 and went public five years later. Today, its applications are used by more than 125,000 customers worldwide including most of the Fortune 500.

OpenText competes in more than a half-dozen software categories. One of the company’s applications helps enterprises manage their business documents, while another can be used to monitor supplier performance. It also offers development tools that ease tasks such as troubleshooting slow applications and testing updates for bugs.

The products that OpenText sells under a software-as-a-service model were a bright spot in its third quarter earnings report. Whereas the company’s total revenue declined, cloud sales increased 1.8% year-over-year, to $463 million. Meanwhile, OpenText’s adjusted earnings of 82 cents per share topped the consensus estimate by five cents. 

A few months after closing the sale of its AMC mainframe software unit last year, OpenText announced a restructuring plan. The company stated at the time that the initiative would cut 1,200 roles and create 800 new ones. It set a goal of lowering annual expenses by $150 million.

The expanded restructuring plan that OpenText detailed today more than doubles its savings goal to between $490 million and $550 million per year. The company now intends to cut 1,200 roles, or 800 more than before. It will also shrink its real-estate footprint. 

“This work is important in continuously improve our A-EBITDA margin, and allow us to reinvest for the long-term in our Aviator AI platform, Content, Security and Cloud growth products,” said OpenText Chief Executive and Technology Officer Mark Barrenechea.

The company expects to realize half of the annual savings it hopes to unlock through the initiative during its 2026 fiscal year. The other half is set to materialize in fiscal 2027.

Photo: OpenText

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