Read the memo Okta's CEO just sent employees announcing layoffs

• Okta is reducing its headcount by 7% on Thursday, the company confirmed to Business Insider.
• The ID verification firm said it's "necessary" to fulfill its "commitment to profitable growth."

Okta is reducing its headcount by 7% on Thursday.

The ID verification company told Business Insider it was a "necessary" decision to ensure profitable growth.

CEO Todd McKinnon told employees in a memo sent at 5:30 a.m. PT that the company is laying off around 400 employees. He told them in the memo shared with BI that workers will find out by email, 15 minutes after receiving the memo, if they will be impacted.

Okta cut 300 full-time employees from its workforce last February, an SEC filing showed. The company told Business Insider its latest global head count is 5,913 employees before Thursday's reductions.

McKinnon told staff in a memo announcing the cuts last year that it had grown too quickly and over-hired. He added that the layoffs were part of a restructuring plan that it undertook in 2023.

He said, "We entered fiscal 2023 with a growth plan based on the demand we experienced in the prior year," he said.

He then added, "This led us to overhire for the macroeconomic reality we're in today. In addition, in the first half of [fiscal 2023], we faced our own execution challenges."

In this year's layoffs announcement, McKinnon said its costs were still too high and that it needed to be "mindful" of its overall spend.

The layoffs are the latest in a wave of job cuts sweeping the tech industry. Okta follows companies like Amazon, Google, and SAP slashing roles last month.

Read the memo sent by McKinnon below: