Lately, the tech sector has been frantically paring jobs ahead of what it sees as economic trouble. Now, digital identity management operation Okta (NASDAQ:OKTA) is joining in and cutting off a heap of tech workers to give it an edge going forward. Reports note that Okta will lay off about 300 employees. That may not sound like much, but for Okta, that’s about 5% of its total workforce.
Based on word from CEO Todd McKinnon, the move reflects “execution challenges” as well as some active overhiring. By cutting back on the employee load now, Okta can reduce its spending, as well as focus on making itself more profitable. Given that Okta managed to triple its overall employee headcount in the space between 2020 and now, that may not be so out of line.
Right about the same time that Okta cut loose 300 employees, a new analyst perspective chipped in to give Okta a further boost. Needham analyst Alex Henderson came out with a new note that upgraded Okta to Buy. Henderson also hiked his price target on the stock to $90 per share. Specifically, Henderson cited improvements in some issues created when Okta bought Auth0 and also some of the issues that plagued the enterprise sales front. Further growth in Okta’s biggest market sector, Customer operations, should also improve Okta’s outlook.
Wall Street seems to agree with Henderson’s assessment. Currently, analyst consensus calls Okta stock a Moderate Buy. However, it comes with 0.16% downside risk thanks to its average price target of $80.43.