PagerDuty Layoffs Affect 7 Percent Of Workforce
In December, the company reported that it generated revenue of $94.2 million for its latest quarter, an increase of 31.3 percent year over year. It also reported that it incurred a net loss of $32.8 million for the same quarter, higher than the year before.
PagerDuty said Tuesday that it would lay off 7 percent of its workforce as part of an effort to “drive efficient growth and expand operating margins,” according to a regulatory filing.
The San Francisco-based cloud-based company specializing in incident response for IT departments had 950 employees as of a year ago, which would mean about 66 employees were affected by the layoffs.
The changes include “reallocating certain roles and realigning teams to continue to improve operational resiliency and agility, and rationalizing 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 percent reduction in headcount, as some roles are eliminated and new roles created in high-talent, lower-cost geographies.”
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 said it 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 Feb. 3. Jeremy Kmet, previously the company’s senior vice president of North America sales and customer acquisition, was appointed senior vice president of global field operations.
In December, PagerDuty reported that it generated revenue of $94.2 million for its latest third quarter, an increase of 31.3 percent year over year. It also reported that it incurred a net loss of $32.8 million for the same quarter versus a $26.3 million net loss a year before. It expects to release its final fourth quarter earnings for fiscal year 2023 this March.
PagerDuty’s stock sank about 8 percent to $26.52 in trading Tuesday as news of the layoffs was announced.
Layoffs have recently hit a slew of tech companies, from Microsoft to Amazon and Google and others, as the pandemic IT boom has mostly ended, interest rates have risen and inflation has put the brakes on extravagant spending across the economy.