Sprout Social is laying off about 20% of its workforce, affecting roughly 260 employees, as the social media management company restructures its business amid rapid changes across the software industry.
The company began notifying affected employees on Wednesday. Chief Executive Ryan Barretto said the decision reflects broader shifts in how software companies are operating as artificial intelligence reshapes business priorities and investment strategies.
“Our industry, and software more broadly, is changing quickly,” he said. “The way companies need to operate and invest has changed with it.”
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The layoffs follow Sprout’s recent push into AI. In May, the company introduced an AI-powered social intelligence platform aimed at helping businesses better manage their social media presence. It also expanded Trellis, its agentic AI engine, with new capabilities for publishing content and analyzing social media data.
Sprout joins a growing list of technology companies that have cited AI-driven changes while reducing headcount. Oracle said in June that it eliminated 21,000 jobs as it redirected spending toward AI initiatives. Cisco and Meta have also announced workforce reductions of 20% and 10%, respectively, while pointing to evolving business priorities.
Among the largest layoffs this year, Block, the parent company of Square and Cash App, said it would cut 40% of its workforce, stating that AI had fundamentally changed how the company operates.
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Sprout expects the restructuring to result in pre-tax charges of between $18 million and $20 million, largely related to severance and employee benefits. The company said most of those costs will be recorded during the third quarter, when the layoffs are expected to be completed.
Employees affected by the cuts will receive 12 weeks of base pay, plus an additional week of salary for each year of service. The company will also provide six months of fully paid healthcare coverage, a cash payment equal to the value of equity scheduled to vest over the next 90 days, and three months of outplacement assistance.
The announcement comes after Sprout reported stronger financial performance in its most recent quarter. In May, the company posted higher revenue and a narrower loss. On Wednesday, it also said it expects its results for the quarter ended in June to come in at the high end of its previously issued guidance.