ServiceNow Stocks Move Lower as New Layoff Round Follows 35% Slide

What happened

ServiceNow launched global layoffs affecting employees in the U.K., U.S. and India after its shares fell 35% from October 23 to November 5. The company described the cuts as structural, while severance costs rose to $167 million in the first nine months of 2026, compared with $53 million a year earlier.

Confirmed

Global impact / market context

Fewer employees could reduce ongoing staff costs and lift profit per sale, but rising severance costs weigh on near-term results. The deeper investor concern is whether slower hiring reflects efficiency gains or weaker demand for ServiceNow’s software, which could restrain future revenue growth.

Analyst inference

The article links pressure on the shares to fourth-quarter constant-currency cRPO growth guidance of 18.5%, below analysts’ 19.8% expectation. cRPO means contracted subscription revenue expected to be recognized in the future, so it offers a signal of demand and potential revenue.

Confirmed

What to watch

1. Check whether fourth-quarter cRPO growth beats the company’s 18.5% guidance; stronger contracted demand could ease concern that customers are buying fewer software subscriptions. Analyst inference
2. Track severance costs against the prior-year comparison of $53 million for the first nine months; continued high costs could delay any benefit from a smaller workforce. Analyst inference
3. Watch for further explanation of how AI efficiency gains affect hiring and software demand, since management linked slower hiring to gains it says exceed $1 billion annualized. Confirmed

Evidence

• gurufocus.com