Cornerstone OnDemand Inc. has announced a restructuring plan that would lead to a total workforce reduction of about 6%.
The plan involves cutting the headcount of the company's global service delivery team and some of its sales teams. The reductions are expected to be completed by March 2018 for the service delivery team and by December 2017 for the sales teams.
The company said the restructuring is part of its renewed focus on recurring, or subscription-based, revenue growth and driving cost reductions to boost operating margins and free cash flow.
The restructuring is expected to result in about $3.5 million of cash expenditures, almost all of which will be severance costs, and about $1.5 million of noncash expenditures mainly consisting of stock-based compensation expense. The total expenditures projected to be incurred from the restructuring is about $5.0 million. Most of the pretax, workforce-related restructuring charges are expected to be recognized in the quarters ended Dec. 31, 2017, and March 31, 2018.
Additionally, the company's board has named Jeffrey Lautenbach president of global field operations, effective as of Jan. 2, 2018. He most recently served as president of worldwide field operations at Jive Software Inc., a provider of business communication and collaboration solutions.
Cornerstone OnDemand COO Kirsten Helvey is resigning from the role, effective as of March 31, 2018.