Pegasystems (NASDAQ: PEGA) to take $13M charge for AI reorg in consulting unit

Rhea-AI Filing Summary

Pegasystems Inc. is restructuring its organization, primarily within its Consulting group, to better align roles and capacity with an AI-first delivery model and its 2026 priorities. The company expects this reorganization to include some role eliminations and broader changes to how teams are structured.

As a result of these actions, Pegasystems expects to record an estimated charge of approximately $13 million in the fourth quarter of 2025, mainly for cash severance and related benefits for terminated employees. Notifications to affected employees are underway, with communications expected to be substantially completed in the first quarter of 2026.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

____________________

 FORM 8-K

____________________

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 7, 2026

____________________

PEGASYSTEMS INC.

(Exact name of Registrant as specified in its charter)

____________________

Massachusetts			1-11859			04-2787865
(State or other jurisdiction of incorporation)			(Commission File Number)			(IRS Employer Identification No.)

225 Wyman Street, Waltham, MA 02451

(Address of principal executive offices, including zip code)

(617) 374-9600

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading symbol(s)			Name of each exchange on which registered
Common Stock, $.01 par value per share			PEGA			NASDAQ Global Select Market

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).                         

                                                Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.05. Costs Associated with Exit or Disposal Activities

AI is altering how quickly ideas can move from concept to reality, and raising client expectations for speed, precision, and results, transforming not just how Pegasystems builds, but how we deliver value with reliability and scale.

To better align roles and capacity to an AI-first delivery model and to support our 2026 priorities, on January 7, 2026, Pegasystems Inc. (the “Company”) committed to making organizational changes, primarily impacting the Consulting organization. This includes some role eliminations and reorganization. The Company has begun notifying affected employees, and communications to impacted persons or their representatives are expected to be substantially completed in the first quarter of 2026. The Company expects to incur a charge of approximately $13 million in the fourth quarter of 2025 related principally to cash severance and related benefit costs for terminated employees.

This report contains statements about our future expectations, plans, and prospects of our business that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, including anticipated charges in connection with the reduction in force, our estimated restructuring costs, and the timing of these costs. Forward-looking projections and expectations are inherently uncertain, and our actual results may differ materially from those indicated by the forward-looking statements in this document as a result of various important factors, including but not limited to flaws in the assumptions and judgments upon which our forecasts and estimates are based and our ability to execute on our strategy.

Item 9.01     Financial Statements and Exhibits

Exhibit No.						Description
104						Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

						Pegasystems Inc.
Dated:			January 12, 2026			By:			/s/ KENNETH STILLWELL
									Kenneth Stillwell
									Chief Operating Officer and Chief Financial Officer
									(Principal Financial Officer)

FAQ

What organizational changes did Pegasystems (PEGA) announce?

Pegasystems announced organizational changes primarily affecting its Consulting organization, including some role eliminations and a reorganization to support an AI-first delivery model and 2026 priorities.

How much is Pegasystems expecting to record in restructuring charges?

Pegasystems expects to incur a charge of approximately $13 million in the fourth quarter of 2025, mainly related to cash severance and associated benefit costs for terminated employees.

When will Pegasystems complete notifications to affected employees?

Pegasystems has begun notifying affected employees and expects communications to impacted persons or their representatives to be substantially completed in the first quarter of 2026.

Which part of Pegasystems is most affected by the restructuring?

The restructuring primarily impacts Pegasystems’ Consulting organization, where roles are being realigned and some positions are being eliminated to support an AI-first delivery approach.

Why is Pegasystems undertaking an AI-first reorganization?

Pegasystems states that AI is accelerating how ideas move from concept to reality and raising client expectations for speed, precision, and results, so it is realigning roles and capacity to an AI-first delivery model to better support its 2026 priorities.

Are the restructuring cost estimates at Pegasystems final?

The company describes the $13 million restructuring charge as an expectation and includes forward-looking statements language noting that actual results may differ due to various factors and execution risks.