OpenText announces 1,600 job cuts as it adopts an AI-first strategy, reshaping workforce roles and targeting $550M in annual savings.
In a bold move signaling a significant shift in strategy, Canadian software leader OpenText has announced the layoff of 1,600 employees globally. The company is doubling down on artificial intelligence as a foundational pillar of its operations, joining a growing list of tech firms that now view AI as non-negotiable.
AI Takes Center Stage in Company Strategy
An internal email from CEO Mark Barrenechea, accessed by Maple News Wire, outlined a 10-point AI mandate for employees. “AI is now the number one priority and a baseline expectation,” Barrenechea wrote, emphasizing that tasks traditionally done by humans will increasingly be handled by intelligent machines.
Barrenechea said the company conducted a “deep analysis” of roles and their potential to be automated. “The work still needs to be done—it’s just going to be done with a machine via AI,” he added.
Strategic Reductions and Reinvestments
The 1,600 layoffs are part of an expanded version of OpenText’s business optimization plan, initially announced in July 2024. That plan previously resulted in 1,200 job cuts and 800 new roles created. With the new announcement, the company’s total net workforce reduction climbs to 2,000 positions.
Despite these cuts, OpenText plans to reinvest by adding 1,000 roles in high-impact functions and strategic locations. While exact geographical impacts were not disclosed, the company confirmed that the changes are global in nature.
Financial Impact and AI-Driven Efficiency
In its Q3 2025 earnings call, Barrenechea revealed that the optimization efforts and other savings measures are projected to save OpenText between $490 million and $550 million USD annually. He directly linked these savings to AI-driven efficiencies.
Employees are now expected to demonstrate AI competency, and new hires must possess AI-specific skills. AI use will also be integrated into performance evaluations, and employees seeking additional resources must justify why the task can’t be automated.
Echoes Across Canadian Tech
OpenText’s AI-forward approach mirrors similar moves by other Canadian tech heavyweights. In April, Shopify CEO Tobi Lütke issued a memo requiring staff to justify new hires based on AI capabilities, a strategy that drew praise from leaders like LinkedIn’s Reid Hoffman.
Macroeconomic Pressures and Sectoral Impacts
OpenText’s decision comes amid broader economic challenges, including US tariffs and reduced government spending, which the company cited as factors in a 13% year-over-year revenue decline. The decline was also influenced by OpenText’s exit from the mainframe business of its recent acquisition, Micro Focus International.
Despite these pressures, Barrenechea maintained that customers remain committed to long-term strategic initiatives, though near-term spending has been affected.
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