Legal Tech Company DISCO Announces Layoffs as Part of Cost-Reduction Efforts
Legal tech company DISCO announced plans to lay off 62 employees, or 9% of its global staff, as stated in a Form 8-K filed with the SEC on January 19, 2023. The layoffs are part of cost-reduction initiatives aimed at improving the company's profitability. The company estimates that the layoffs will result in non-recurring charges of approximately $0.9 million to $1.1 million, including cash expenditures for employee severance and other termination benefits.
62 Employees to be Affected, $1 Million in Non-Recurring Charges Expected in Q1 2023
DISCO, an e-discovery and legal software provider, announced plans to lay off 62 employees, or 9% of its global staff, as stated in a Form 8-K filed with the SEC on January 19, 2023. The company expects to incur the majority of these charges in the first quarter of 2023. This move comes as part of cost-reduction initiatives aimed at improving the company's profitability. Despite rumors of layoffs in recent weeks, the company declined to confirm or issue an official statement.
This is not the first time DISCO has laid off staff in recent years. In January 2019, the company announced plans to triple its workforce over two years after closing an $83 million funding round. However, in April 2020, the company announced COVID-related layoffs, and in October 2020, they announced an additional $60 million funding round. DISCO is not alone in the legal tech industry in making staff reductions as a way to brace for a potential economic downturn. In November 2022, legal app store Reynen Court announced it was reducing headcount, while in December 2022, e-discovery provider Relativity announced that it was laying off approximately 10% of its workforce.
