Thread regarding Open Text Corp. layoffs

The "One-Third" comment is not a victory lap. It is a warning. We are telling Wall Street: "Don't worry about our margins. We have another $300M+ of costs (people) to remove before June."

@az honestly wouldn’t hate that. It’s not like Opentext did anything great for us. At least rocket had the IBM biz

All the savings is selling off the other BUs. There could be layoffs but that’s happening industry wide right now as well.

If you are in the SMB/C (Carbonite/Webroot) unit, you are in the most vulnerable spot in the company right now. It’s non-core to OpenText's AI strategy and the perfect target for the Bain/Rocket buy and strip model.

Rocket Software might buy SMBC too. They buy mature software companies to run them long-term.

Rocket is owned by Bain Capital (Private Equity). They love the "India model." Too!

If Opentext doesn't cut your team before the sale, Rocket might do it 12 months after the sale.

Non-core

If you are to be sold/divestitured, IMO you are not safe either if in the following roles.

Management: Layers of management are often thinned out to make the org chart look "lean and efficient" for the buyer.

Underperforming Sales: They will want the revenue numbers to look stable, so they may cut underperforming reps to reduce the cost line while keeping the "book of business."

If you are a high-salaried engineer in the US/UK/EU and there are counterparts in India or cheaper regions doing similar work, OT might cut the high-cost roles to show the buyer a "higher margin" business.

The CFO admitted they have only realized one-third of the $500M+ savings target so far this year. This implies they need to cut significantly more costs (or sell more assets) between now and June 30th to hit their target.

OpenText’s fiscal year ends on June 30th. April is the start of Q4. Companies often make cuts at the start of Q4 to get expenses off the books before the year-end financial report.

They are moving resources away from legacy/non-core areas and into "Content Cloud" and "AI" roles.

They mentioned "investment in the sales team," but this is often balanced by cuts in other areas (like support or legacy engineering) to keep margins flat.

The new CEO, Ayman Antoun, comes from IBM. He led the division that divested Kyndryl (a massive spin-off). His background suggests he was hired specifically to execute this strategy of slimming down the company and focusing on the core profitable units.