Zscaler plans to reduce its worldwide workforce by approximately 3% and expects aggregate non-recurring charges of approximately $30.0 million to $33.0 million. For investors, the restructuring is intended to redirect resources toward AI and growth initiatives, while most of the charges are expected in the first half of fiscal 2027.

Key Highlights

  • Zscaler expects to record aggregate non-recurring charges of approximately $30.0 million to $33.0 million.
  • Most restructuring expenses are expected to be recognized in the first half of fiscal 2027.
  • Fiscal 2026 Revenue increased 25% year over year to $3,353 million.

Zscaler, Inc. (NASDAQ: ZS) plans to reduce its worldwide workforce by approximately 3% as it reallocates resources to support AI and growth initiatives. The company expects the restructuring to produce aggregate non-recurring charges of approximately $30.0 million to $33.0 million, primarily tied to employee severance and benefit costs. Zscaler committed to the plan on September 1, 2026.

Workforce Plan Targets 3%

The workforce reduction applies worldwide. Zscaler said the resource reallocation is intended to provide additional capacity for its AI and growth initiatives. The expected charges are non-recurring and consist primarily of severance and benefit expenses. Most of the costs are expected to be recognized in the first half of fiscal 2027. Zscaler said actual expenses may differ materially from its estimates.

Fiscal 2026 Results

Zscaler also announced fiscal fourth-quarter and full-year results. Quarterly revenue rose 25% year over year to $898.2 million, while annual revenue increased 25% year over year to $3,353 million. Fourth-quarter GAAP loss from operations was $15.5 million, compared with $32.2 million in the prior-year quarter. Non-GAAP income from operations reached $218.4 million, versus $158.9 million previously. GAAP net loss was $3.4 million, compared with $17.6 million. Non-GAAP Net Income was $198.2 million, up from $146.7 million. Diluted GAAP net loss per share was $0.02, compared with $0.11. Non-GAAP net income per share was $1.19, compared with $0.89.

AI Capacity and Financial Effects

The company said the restructuring is connected to its plan to strategically redirect resources. Its stated objective is to create additional capacity for AI and growth initiatives. Cash provided by operations during the fourth quarter was $279.3 million. Zscaler identified risks involving implementation of its initiatives, capturing expected efficiencies, managing growth, culture and talent, and executing its plans and strategies.