Innodata Inc. (NASDAQ:INOD) stock took a nosedive Tuesday, dropping more than 27% after reports that the AI data engineering company laid off about 550 employees in India, with additional job cuts reportedly hitting its Philippines workforce.

Layoff Reports Raise Concerns

New Jersey-based Innodata provides AI data engineering services across the model development lifecycle, including training, post-training, evaluation, and deployment. The company had 10,020 full-time employees as of Dec. 31, 2025.

Innodata has not yet publicly confirmed the total number of employees affected, raising uncertainty about the full extent of the workforce reductions and their potential impact on existing projects and future business operations.

Trading Volume Spikes

The steep decline was accompanied by a surge in trading activity, with approximately 7.8 million shares changing hands, more than five times the stock's 100-day average trading volume of 1.4 million shares.

Innodata's market capitalization stood at approximately $2.1 billion at the close of the previous trading session.

Technical Indicators Signal More Weakness

Innodata stock remains under pressure as several technical indicators point to a bearish trend.

The stock trades below its 20-day simple moving average (SMA) of $60.05 and its 200-day SMA of $61.64. Moreover, shares remain well below the 100-day SMA of $66.80.

The moving average convergence divergence (MACD) indicator also remains below its signal line. This suggests that bearish momentum continues to dominate trading.

Additionally, a death cross formed in September when the 50-day moving average fell below the 200-day moving average. That pattern continues to signal longer-term weakness.

Traders are watching $41 as a key support level. Meanwhile, $48.50 represents immediate resistance if the stock rebounds.

Innodata shares have also fallen 44.40% over the past 12 months, adding to concerns about the stock's broader trend.

Earnings And Analyst Outlook

Investors are now looking ahead to Innodata's next earnings report, scheduled for Nov. 5.

Analysts expect earnings of 17 cents per share, down from 24 cents a year earlier. However, revenue is forecast to rise to $83.32 million from $62.55 million.

Meanwhile, Innodata trades at a price-to-earnings ratio of 46.4, reflecting a premium valuation. Analysts maintain a consensus strong buy rating. The stock carries an average analyst price forecast of $130.

Innodata Price Action

INOD Price Action: Innodata shares were down 27.04% at $43.71 at the time of publication on Tuesday, according to market data.