Intuit, the Mountain View, California-based tax software maker, plans to cut approximately 1,800 jobs and close two locations in North America to prepare for hiring new employees in the field of Artificial Intelligence.

On Wednesday, the company announced that it will cut around 10% of its workforce and close locations in Boise, Idaho, and Edmonton, Canada. This is part of the strategy to strengthen technological teams and capabilities at strategic locations.

Sasan Goodarzi, CEO of Intuit, stated in a letter to employees that the company is reallocating resources to key growth areas, including artificial intelligence.

The layoffs at Intuit are not for cost-cutting purposes, as the company plans to hire another 1,800 employees in the upcoming fiscal year, which starts next month, to support its growth objectives. The new positions will primarily be in engineering, product development, and customer-oriented roles such as sales and marketing, according to Goodarzi.

In the context of the measures announced today, we expect our total workforce to grow in the fiscal year 2025 and beyond," said Goodarzi.

The costs for the layoffs and closures are estimated to be around 250 to 260 million US dollars, mostly occurring in the fourth fiscal quarter which ends this month.

The expenses include $217 million to $227 million for severance payments and employee benefits as well as approximately $33 million in non-cash expenses related to stock-based compensation and site closures.

The company expects that all measures related to the restructuring plan will be completed by the end of the first fiscal quarter on October 31.

According to a regulatory report, Intuit had about 18,000 employees in ten countries as of July 2023.

Intuit shares fell by about 3% to $634.40 on Wednesday morning.