Key Takeaways
- Innodata stock fell 28% after reports that it abruptly laid off nearly 550 employees in India, with more cuts in the Philippines.
- The termination notices reportedly pointed to a “ramp-down of the business assignment,” which raises the question of whether customer work is shrinking.
- Innodata’s two largest customers made up 71% of second-quarter revenue, so one lost program could put the 2027 growth estimate at risk.
- Innodata hasn’t commented. Its third-quarter report on Nov. 5 is the first real chance to hear from management.
Innodata (INOD) stock sank 28% today after reports that the AI data company abruptly laid off nearly 550 employees in India on Monday, with more cuts in the Philippines.
Innodata hasn’t said anything yet. But how the cuts reportedly happened, and the reason given for them, is what has investors running for the exit.
Logged Out Mid-Shift
India Today broke the story Tuesday morning. Employees reportedly started Monday like any other workday, then lost access to company systems partway through it.
One laid-off employee in Delhi told India Today: “One by one, we started losing access to our official devices. Laptops were logged out, and official IDs deactivated.”
Termination emails reportedly landed in workers’ personal inboxes later that day. They cited a “ramp-down of the business assignment” and said the decision wasn’t about individual performance.
That reason is the part shareholders should care about.
Innodata Lives and Dies by Two Customers
Innodata’s business leans heavily on a handful of big tech clients. Its two largest made up 71% of second-quarter revenue, according to its 10-Q. The reported ramp-down raises the possibility that customer work is shrinking. It doesn’t tell us which customer, how much revenue is at stake, or whether the cut is temporary.
And the Street’s growth expectations depend on that work. Analysts expect revenue to jump from $252 million in 2025 to $360 million this year, then $460 million in 2027:
Most of 2026 is already done, so this year’s number has less room to slip. If a program is gone, 2027 takes the hit.
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What Innodata Stock Is Pricing Now
Innodata ended Monday at about 40x forward earnings. After today’s drop, it’s closer to 29x. That’s still a growth multiple, and it only holds if those revenue estimates do.
I’d stay on the sidelines until management explains the cuts and what they mean for revenue. A smaller payroll could cushion any drop in work, but without knowing the revenue lost or the severance cost, the net effect on margins is anyone’s guess.
The reports could also make this sound worse than it is. Innodata hasn’t confirmed the headcount or the reason. It reports third-quarter results after the close on Thursday, Nov. 5, and that call is where we find out.
So what is Innodata stock actually worth?
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