Another day, more layoffs — this time Okta is cutting 300 workers due primarily to overhiring.

Okta announced the layoffs in a filing with the U.S. Securities and Exchange Commission (SEC). It announced a restructuring plan to reduce operating expenses and improve profitability. The layoffs impact 5% of Okta’s workforce.

While bad news for employees, the move was good for the identity and access management company’s stock. It jumped toward a five-month high, up nearly 6% as of 2:45 p.m. ET Thursday.

“In connection with the [restructuring] plan, the company estimates that it will recognize approximately $15 million of restructuring charges in the fourth quarter of fiscal 2023 for future cash employee severance and benefits costs, which primarily will be paid in the first quarter of fiscal 2024,” Okta said. “The company also expects to record an insignificant adjustment to its stock-based compensation expense in the first quarter of fiscal 2024 related to equity compensation for employees who were terminated.”

Okta‘s fiscal 2024 began this month.

Email to Okta Employees

Okta CEO Todd McKinnon also sent an email to employees about the restructuring plan and rapid pace of layoffs. He said cutting workers was a “very difficult” decision.

Okta’s Todd McKinnon

“If you work in the United States, you will receive an email in the next 15 minutes notifying you if your role is impacted or not,” he said. “If your role is impacted, your leadership will schedule a meeting this morning to discuss next steps. For employees outside the United States, the notification process may be different due to local laws and practices. A workforce reduction like this is the last thing I wanted to do, and I am truly sorry.”

Okta entered fiscal 2023 with a growth plan based on the demand it experienced in the prior year, McKinnon said.

“This led us to overhire for the macroeconomic reality we’re in today,” he said. “In addition, in the first half of fiscal 2023, we faced our own execution challenges. I wish I had responded sooner, but we’re doing the best we can today to adjust to this reality.”