The layoffs will affect about 66 people, mostly in North America
PagerDuty said on Tuesday that it would lay off 7% of its workforce as part of an effort to 'drive efficient growth and expand operating margins,' according to a regulatory filing.
The company reported $94.2 million in revenue for its latest quarter in December, an increase of 31.3% year-on-year. However, its net loss reached $32.8 million for the same quarter, higher than the year before.
The San Francisco-based cloud-based company, which specialises in incident response for IT departments, had 950 employees as of a year ago, which would mean about 66 employees are affected by the layoffs.
The changes include 'reallocating certain roles and realigning teams to continue to improve operational resiliency and agility, and rationalising the Company's real estate footprint,' the company said in a filing with the U.S. Securities and Exchange commission. 'The immediate impact is a 7% reduction in headcount, as some roles are eliminated and new roles created in high-talent, lower-cost geographies.'
Affected workers will receive severance pay (average 11 weeks' worth, with more based on tenure) and company healthcare coverage for 'a minimum' of three-four months. PagerDuty is also providing career transition support. Impacted employees are being notified today.
PagerDuty said it expected to incur non-recurring charges in a range of $5 million and $7 million in connection with the headcount reductions, primarily from severance payments, notice pay, employee benefits contributions and related costs. The company expects that the majority of the restructuring charges will be incurred in the fourth quarter of fiscal 2023 and 'that the implementation of the headcount reductions, including cash payments, will be substantially complete by the end of the first quarter of fiscal 2024.'
Also on Tuesday, PagerDuty said its chief revenue officer, Dave Justice, had given notice that he will resign from his position on 3rd February. Jeremy Kmet, previously the company's SVP of North America sales and customer acquisition, was appointed SVP of global field operations.
PagerDuty's stock sank about 8% to $26.52 in trading Tuesday as news of the layoffs was announced.
Layoffs have hit a slew of tech companies, from Microsoft to Amazon, Google and others, as the pandemic IT boom has mostly ended, interest rates are rising and inflation has put the brakes on extravagant spending across the global economy.
Computing says:
CEO Jennifer Tejada danced around the layoffs like a boxer in a blog post, taking more than 300 words to get to the point and then moving on to talk about promotions and strategic changes for the company, which is sure to assuage the concerns of those people receiving their notices today. She ended by quoting Martin Luther King: "The ultimate measure of a [leader] is not where [they] stand in the moments of comfort and convenience, but where [they] stand in times of challenge and controversy."
It's not the worst redundancy notice we've seen at Computing, but it does come across as insensitive.
