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DocuSign Stock Jumps On Job Cut Plan Ahead Of New CEO Allan Thygesen

DocuSign said the job cuts will "improve operating margin and support the company’s growth, scale and profitability objectives".

Updated at 10:06 am EST

DocuSign  (DOCU) - Get Free Report shares moved higher Wednesday after the online signature vending group unveiled a restructuring plan that will take place under new CEO Allan Thygesen.

The group said it will cut around 9% of its workforce -- or possibly as many as 670 people -- at a cost of around $35 million, as it moves to "improve operating margin and support the Company’s growth, scale and profitability objectives", according to its filing with the U.S. Securities and Exchange Commission. The company said it should have the plan "substantially completed" by the end of its current fiscal year.

DocuSign shares were marked 3.5% higher in early Wednesday trading to change hands at $54.80 each, a move that would still leave the stock nursing a year-to-date decline of around 65%.

Late last week, DocuSign named Thygesen, a former Google ad executive, as the permanent replacement for outgoing CEO Dan Springer, who had run the group since 2017. He will assume CEO duties on October 10.

DocuSign which has been struggling to hold investor interest as pandemic-era restrictions bring more and more professionals back to the office, earned 44 cents per share over the three months ending in July, topping Street forecasts on a non-GAAP basis by around 2 cents per share.

The group also notched a 22% gain in revenues, which hit $622.2 million, and said full-year sales would likely rise to between $2.47 and $2.48 billion and billings of between $2.5 and $2.57 billion, thanks in part to an expanded partnership with Microsoft  (MSFT) - Get Free Report which will see the tech giant using DocuSign's products and services in its contract management workflows.