nCino announced CFO David Rudow will be leaving the cloud banking provider effective Jan. 31 as the company will lay off about 7% of its workforce, or 117 employees, according to Wednesday press release and a company spokesperson. Chief corporate development and strategy officer Greg Orenstein will move into its CFO seat.
The Wilmington, N.C.-based fintech’s cuts are part of a bid to shift from a “pure growth company to a best-in-case profitable growth company,” CEO Pierre Naudé wrote in a letter to employees. nCino provides cloud banking solutions to financial institutions.
The move is latest in a surge of tech industry layoffs. Software giant Microsoft also announced plans this week to slash its workforce by 10,000 employees, representing under 5% of its total workforce, it said. While the Redmond, Washington.-based company is eliminating roles “in some areas, it’s important to note that we will continue to hire in key strategic areas,” Microsoft CEO Satya Nadella wrote in a letter to employees.
Orenstein, 53, joined nCino in 2015 and has held a variety of executive positions at the company, including serving as its chief corporate development & legal officer and secretary from October 2015 to November 2019, according to a company filing with the Securities and Exchange Commission.
Tech braces for recession
nCino and Microsoft’s layoffs follow previous workforce cuts by technology and software companies earlier in the month, as the technology sector deals with economic headwinds including plummeting valuations, declining sales for PCs and software, and high inflation.
Software provider Salesforce announced in early January it would be cutting its workforce by 10% following a period of aggressive hiring, following layoffs by ecommerce company Amazon which affected 18,000 workers, according to a Wall Street Journal report. Online personal styling service Stich Fix also announced it would be cutting down its salaried positions by 20%, affecting about 330 employees.
nCino’s layoffs, as well as planned reductions to its office space, will cost the cloud banking provider between $4.5 million to $5.0 million which it expects to incur in the fourth quarter of fiscal 2023, according to the SEC filing.
The changes, “while incredibly difficult, will enable us to continue operating from a position of strength” while it transitions to a profitable growth company, an nCino spokesperson said in an email.
nCino also affirmed its fourth quarter and full-year guidance Wednesday, expecting full-year revenue for fiscal year 2023 ending Jan. 31 of between $403 million and $404 million, it said. The company reported revenue of $105.3 million in its third quarter of fiscal 2023 ending Oct. 31, 2022, a 50% increase year-over-year, according to its Nov. 30 earnings results.
Financial leadership shifts
Continued economic headwinds could lead to increased turnover among financial leadership. CFOs who were able to deliver results when the economy was booming may, in an economic slump, find themselves in an “uncomfortable position keeping CEOs and shareholders happy,” Shawn Cole, president of executive search firm Cowen Partners said in an email in response to questions.
As economic pressures eliminate traditional forms of financing and make cash flow “paramount,” turnover in the CFO position will continue, with companies seeking out “wartime CFOs,” he said.
“What we find is there are more requests for ‘turnaround experts’,” Cole said, with skills in areas such as cost reduction, pricing strategies, technical accounting, and financial reporting now “at the forefront during these times,” he said.
“There is a short supply of turnaround experienced CFOs and those with the experience will find themselves with a lot of job opportunities in the next few years,” he said. “Not all of them are failing businesses either, it’s just an emphasis on core fundamentals from operators and shareholders.”