New Relic Layoffs Include Partner Roles
“For Relics who are leaving, I want to express my sincere gratitude for your dedication and contributions during your time here,” CEO Bill Staples said Tuesday.
New Relic will lay off up to 255 employees – about 10 percent of the company’s workers – as part of a restructuring plan, the cloud-based observability platform vendor revealed Tuesday.
The layoffs appear to have included roles associated with solution providers and partners, according to a CRN review of LinkedIn posts by employees of San Francisco-based New Relic.
In a blog post Tuesday, New Relic CEO Bill Staples said that the company will lay off about 212 employees – 155 in the U.S. and 57 outside the country.
A Tuesday filing with the U.S. Securities and Exchange Commission provides 255 as the number including people who left the company in May and June due to “reorganization of specific functions and performance management.” A separate filing showed that New Relic had 2,663 employees across 16 countries as of March 31. That number includes temporary employees and 919 employees outside of the U.S.
CRN has reached out to New Relic for additional comment.
Staples said that the layoffs are part of a three-year transition into a more profitable business, exiting subscriptions and focusing on consumption.
That exit will be completed in the next four to six quarters, he said.
“For Relics who are leaving, I want to express my sincere gratitude for your dedication and contributions during your time here,” he said. “For Relics who are not departing as a result of these changes, I ask for your patience as we focus on communication with the Relics who are impacted today and into Wednesday.”
New Relic previously laid off 160 employees in 2021 and 110 in 2022, according to The Oregonian newspaper.
The layoffs hit every job function, level and region for the vendor, Staples said. The restructuring had to happen now “to hasten the arrival of our future, especially in light of current economic uncertainty, which has caused every business to look for ways to be more efficient and optimize spend, including our customers’ consumption of New Relic.”
“Now that we can more clearly see the post-transition business, financial profile and resourcing we will need, we are committed to act boldly so that we can accelerate our delivery of this promise, and thereby leave the days of ‘transition’ behind,” Staples said.
New Relic decided which employees to let go based on leaders’ “rigorous review with me across their respective functions to ensure that every resource will be aligned with our future needs,” he said.
“The roles impacted today reflect the outcome of that thorough review, which required difficult decisions around role redundancies, roles or skills not aligned with our strategic priorities, and the performance of individuals, teams, and programs.”
According to the SEC filing, New Relic will also hire around 130 new employees “in targeted areas of the organization to address opportunities for consumption business growth going forward.” New Relic expects to end its 2024 fiscal year with about the same headcount as the same period a year prior.
New Relic’s 2023 fiscal year ended March 31 with total revenue of $925.6 million, up 18 percent year over year. Consumption revenue was $707.7 million, up 60 percent year over year.
The vendor reported $185.2 million in losses from operations for the fiscal year, an improvement of about 20 percent year over year.
The vendor will spend about $18 million to $22 million as part of the layoffs, according to the filing. About 75 percent of that will be in cash. The company will recognize most of the costs in the first quarter of its 2024 fiscal year, which ends June 30, this Friday.
The vendor has a partner program for resellers, managed services providers, system integrators and other partner business types.
A review of LinkedIn posts showed that roles related to the channel, marketing, engineering, research and architecture were affected.
“Sadly, my role was eliminated in today’s layoff at New Relic,” Ron Crocker, a fellow and architect with the company for more than eight years, said on LinkedIn. “To say I was shocked is an understatement. I’m quite proud of the significant changes that I helped create within New Relic that allowed them to grow by 100x.”
Other laid off employees included an MSP partner engineer team lead, a senior technical content marketing manager who had been with the company two years, a senior software engineering manager, a senior user experience researcher with the company for more than two years, a senior global partner enablement manager with the company for more than a year, a principal network architect with the company for more than two years, a senior director of product security with the company for about two years, a senior go-to-market recruiter with the company for about a year, and a manager of technical account management and solutions consulting with the company for about four years.
LinkedIn users posted about job opportunities at the following companies:
New Relic’s layoffs come as multiple tech vendors contend with a slowdown in business following high demand for remote working tools at the height of the pandemic.