PagerDuty announced on Tuesday that it would lay off 7% of its personnel in order to ‘drive efficient growth and enhance operating margins,’ according to a regulatory filing.
The company recorded $94.2 million in revenue for the December quarter, a 31.3% rise year over year. However, its net loss for the same period was $32.8 million, which was larger than the previous year.
The San Francisco-based cloud-based company, which specializes in incident response for IT organizations, had 950 employees a year ago, which means the layoffs will effect approximately 66 employees.
Among the adjustments are’reallocating certain jobs and realigning teams to continue to improve operational resiliency and agility, as well as rationalizing the Company’s real estate footprint,’ according to a filing with the US Securities and Exchange Commission. ‘As certain functions are eliminated and other roles are created in high-talent, lower-cost locations, the immediate consequence is a 7% reduction in headcount.’
Affected employees will receive severance pay (an average of 11 weeks, with more depending on tenure) and company healthcare coverage for ‘at least’ three to four months. PagerDuty also offers career transition assistance. Employees who are affected are being contacted today.
PagerDuty estimated that non-recurring charges in the range of $5 million to $7 million would be incurred as a result of the workforce reductions, mostly from severance payments, notice pay, employee benefits contributions, and related costs. The majority of the restructuring expenditures, according to the company, will be incurred in the fourth quarter of fiscal 2023, and ‘the implementation of the headcount reductions, including cash payments, will be essentially complete by the end of the first quarter of fiscal 2024.’
Also on Tuesday, PagerDuty said that its chief revenue officer, Dave Justice, has given notice that he would retire on February 3rd. Jeremy Kmet, the company’s previous SVP of North America sales and customer acquisition, has been promoted to SVP of global field operations.
PagerDuty’s stock sank about 8% to $26.52 in trading Tuesday as news of the layoffs was announced.
