Kitchener-Waterloo-based OpenText is cutting an additional 1,600 jobs as it becomes the latest Canadian tech firm to make AI use a baseline expectation for employees.
“AI is a step function to be able to reduce expenses in companies over time.”
Mark Barrenechea
OpenText
Internal emails sent by OpenText CEO Mark Barrenechea to employees in April and obtained by BetaKit detail the company’s embrace of AI as a “number one priority and baseline expectation.” One email said OpenText will reduce its headcount by approximately 1,600 employees and “strategically add back 1,000 employees in key locations and high-impact functions.” The email notes that the “vast majority of impacted employees” have been informed.
OpenText’s senior vice president of corporate communications, Erin McCabe, confirmed to BetaKit over email that the 1,600 new reductions are an expansion of OpenText’s “business optimization plan” laid out in July 2024, which cut roughly 1,200 roles while creating 800 new ones. This brings the plan’s total net reductions to 2,000 employees, McCabe said.
Founded in 1991, OpenText provides a suite of cloud-based information management solutions to businesses. The company has adapted over the years to introduce cloud and AI services, including cybersecurity and AI agents.
The company employs roughly 23,000 workers, according to its website, with more than 3,000 in Canada, according to LinkedIn. McCabe said that OpenText is not disclosing country-specific impacts, but “the optimization plan is being implemented globally and is aligned with our strategy to place the right talent in the right locations.”
In OpenText’s third quarter 2025 earnings call on May 1, Barrenechea claimed the expanded optimization plan, along with other savings initiatives, will generate annual savings of between $490 million to $550 million USD.
Barrenechea added that the headcount reduction is tied to OpenText’s new AI-first approach. In response to an investor question about how OpenText decided on the number of staff reductions, the CEO said the company had conducted a “deep analysis” of which roles could be done with AI.
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“The work still needs to be done, it’s just going to be done with a machine via AI,” Barrenechea said. “AI is a step function to be able to reduce expenses in companies over time.”
Barrenechea detailed this new AI focus in a separate email to employees obtained by BetaKit. The email included 10 numbered points explaining new expectations around AI implementation for employees across the company.
According to the email, new talent hired at OpenText must have AI skills and experience; AI will become a part of performance reviews; employees must demonstrate why AI cannot do the work before asking for more headcount or resources; and employees should learn to prompt and program AI in English.
“AI will totally change OpenText, our work, our customers, our lives,” the email reads. “We are all in.”
OpenText’s full-throttle approach to AI adoption closely mirrors that of Canadian e-commerce giant Shopify. In early April, Shopify CEO Tobi Lütke published an internal memo stating that employees must prove AI can’t do the job before asking for additional resources or headcount. Shopify’s approach to AI garnered support from tech moguls such as LinkedIn co-founder Reid Hoffman and joins a growing list of companies considering AI use before adding talent.
RELATED: Shopify CEO Tobi Lütke tells employees to prove AI can’t do the job before asking for resources
On the earnings call, Barrenechea said that OpenText was impacted this past quarter by the economic uncertainty caused by US global tariffs, though he noted that customers are “continuing with their strategic priorities, even if in some cases reduced near-term spend.” Its latest earnings report showed a 13 percent year-over-year drop in total revenues, which the company mostly attributed to its divestiture from the mainframe computer unit of its recent acquisition target Micro Focus International.
During the earnings call, Barrenechea was also asked about the impact of US government cutbacks, as OpenText sells its software to enterprises that fulfill government contracts.
“There’s no doubt there’s some impact from the US government expense reductions,” Barrenechea said, but added it was “not as significant” as those from US-imposed tariffs.
Feature image courtesy OpenText.