The company reported revenue of $94.2 million for its most recent quarter in December, up 31.3% year over year. However, net loss for the same quarter reached $32.8 million, higher than a year earlier.
The San Francisco-based cloud-based company, which specializes in incident response for IT departments, had 950 employees a year ago, which would mean about 66 employees would be affected by the layoffs.
The changes include “reassigning certain roles and realigning teams to further improve operational resilience and agility, and streamlining the company’s real estate footprint,” the company said in a filing with the Securities and Exchange Commission Commission. ‘The immediate impact is a 7% headcount reduction as some roles are eliminated and new roles are created in regions with high talent and lower costs.’
Affected employees receive a severance payment (11 weeks on average, more depending on length of service) and company health insurance for “at least” three to four months. PagerDuty also offers career change support. Affected employees will be notified today.
PagerDuty said it expects to incur one-time costs of $5 million to $7 million related to the downsizing, primarily from severance payments, termination benefits, employee benefit contributions and related costs. The Company anticipates that the majority of the restructuring costs will be incurred in the fourth quarter of fiscal 2023 and “that the implementation of the workforce 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 announced he would step down from his position on February 3. Jeremy Kmet, previously the company’s SVP of Sales and Account Acquisition in North America, has been appointed SVP of Global Field Operations.
Shares of PagerDuty fell about 8% to $26.52 on Tuesday as news of the layoffs broke.
Layoffs have hit a slew of tech companies, from Microsoft to Amazon, Google and others, as the pandemic IT boom mostly ends, interest rates rise and inflation stymies extravagant spending across the global economy.
Calculate says:
CEO Jennifer Tejada danced like a boxer around the layoffs in a blog post, got more than 300 words to the point, and then talked about promotions and strategic changes for the company, which will surely ease the concerns of those people who receive their notices today. She ended with a quote from 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 termination we’ve ever seen Calculatebut it seems insensitive.
