ServiceNow Records $167 Million in Severance Costs Over Nine Months
Key Facts
ServiceNow is undertaking another round of job cuts as part of a workforce optimization strategy, with severance costs and related expenses reaching $167 million in the nine months ended September 30, 2026, according to the company’s third-quarter filing. The company said it began the strategy during the same period to streamline certain roles through AI-driven efficiencies, while directing investment toward talent in strategic areas. It did not disclose the number of jobs targeted in the current round. It said it eliminated roles in some areas but plans to continue hiring in strategic areas. The move places workforce restructuring within the company’s efforts to align its structure with the efficiencies enabled by AI technologies.
The filing’s figures show severance expenses rose from the year-earlier period. Expenses totaled $87 million in the third quarter of 2026, compared with $24 million in the third quarter of 2025. For the nine-month period, they rose to $167 million through September 30, 2026, from $53 million in the same period of 2025. The figures include severance costs and related expenses, according to the company’s results. The widening gap between the periods reflects the scale of expenses recorded as the workforce optimization strategy was carried out.
The company recorded $153 million in cash payments related to severance costs in the nine months ended September 30, according to its filing. The balance of liabilities related to these costs was $34 million at the end of the period. These figures show the cash payments made and the liabilities remaining at period-end, alongside the expenses that affected its results. The company recorded $167 million in severance costs and related expenses over the same nine months. ServiceNow links these expenses to the workforce optimization strategy it launched during the period.
The workforce changes come as ServiceNow’s subscription business grows. The company said in results published on October 28 that subscription revenue was $3.988 billion in the third quarter of 2026, up 21% year over year. The comparison puts the workforce strategy alongside growth in the core business that the company reported for the same period. It also said its plan includes streamlining certain roles by using AI efficiencies while investing in talent in strategic areas. The company did not specify how many jobs will be eliminated in the current round.
In its guidance for the fourth quarter of 2026, the company forecast subscription revenue of between $4.245 billion and $4.255 billion, with year-over-year growth of between 22.5% and 23%. The guidance coincided with its plan to continue hiring in strategic areas despite eliminating roles elsewhere. ServiceNow said its approved program to achieve further operational efficiencies is expected to be substantially complete during 2026. That timing provides a framework for completing the program, while the filing gave no specific date for the end of the current round of job cuts. The company also did not specify the number of jobs targeted in the filing.