DocuSign, the electronic signature provider that dominates the market, said it plans to cut about 10 percent of its workforce in its second round of layoffs in five months, sending shares of the company plunging nearly 8 percent on Feb. 21.

With business booming during the pandemic, the company doubled its headcount by 2021. Last week’s announced job cuts will affect about 700 people.

The announcement triggered a “negative demand signal” that might not be factored into the stock, according to UBS analyst Karl Keirstead, who cut his rating on the software company from neutral to sell over caution about the stock.

The DocuSign layoffs add to an avalanche of tech layoffs from 2022 that continue to come in thick and fast as the industry struggles with pandemic-level staff numbers in the face of inflation and recession. Employees are being let go in numbers that are breaking records in the tech sector. It’s also becoming clear that companies that already announced layoffs might announce more in the coming weeks, Forbes reported.

Silicon Valley-based DocuSign dominated the electronic signature market in 2022 with a market share of more than 77 percent.

After a pandemic-fueled 200-percent stock price gain in 2020, DocuSign shares fell by about a third in 2021 and by 64 percent in 2022.

Amid slower growth in 2022, the company announced a 9 percent job reduction in September. As of Jan. 31, 2022, the company had 7,461 employees, according to a regulatory filing, Reuters reported.

DocuSign’s technology lets people collect electronic signatures on agreements.

Kierstead cited in his analysis “highly penetrated [total addressable market], an increasingly competitive rival in the form of Adobe, continued contract volume down-sizing risk upon renewals and a slowdown in the [contract-lifecycle-management] segment.”

He also said that DocuSign “has historically been very tied to Salesforce, which embeds DocuSign,” and with Salesforce “going through an unprecedented growth deceleration as well as internal disruption,” the dynamic could affect DocuSign this year, MarketWatch reported. 

DocuSign’s recent layoffs may help operating margins, Kierstead added, but “we question just how big the margin upside will be.”