The majority of the layoffs will be in the company's sales and marketing organizations, it said in a regulatory filing.
Shares of DocuSign closed 8% lower on Monday after the news of the talks being stalled. The stock was trading down around 4% on Tuesday.
The company expects to incur charges of about $28 million to $32 million in connection with the restructuring plan, consisting primarily of cash expenditures for employee transition, notice and severance period.
DocuSign had 7,336 employees, as of Jan. 31, 2023, according to its last annual filing.
The company expects to incur the majority of the restructuring charges in the first quarter of fiscal 2025.
Other tech and media firms such as Amazon.com (AMZN.O), Alphabet (GOOGL.O) and Microsoft (MSFT.O) have also announced layoffs last month as firms grapple with economic uncertainty.
The Wall Street Journal had first reported in December that DocuSign was working with advisers to explore a sale.
DocuSign went public in 2018 with a valuation of $6 billion. It allows customers to sign documents digitally from any electronic device and counts firms such as T-Mobile (TMUS.O) and United Airlines (UAL.O) among its clients.
