Cloud-based company PagerDuty lays off 7%, incurring $5-7M in costs; CEO quotes MLK in blog post.
PagerDuty, a cloud-based company specialising in incident response for IT departments, has announced layoffs of 7% of its workforce, resulting in 66 job losses. The company has said that the changes are part of a restructuring effort to improve operational resiliency and agility, and rationalise their real estate footprint. Affected employees will receive severance pay, with the average being 11 weeks’ worth, and company healthcare coverage for a minimum of three-four months. The company has also said that it expects to incur non-recurring charges in a range of $5 million and $7 million in connection with the headcount reductions.
The announcement of the layoffs comes 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. PagerDuty’s stock sank about 8% to $26.52 in trading Tuesday as news of the layoffs was announced.
The layoffs have been met with mixed reactions. While some are sympathetic to the company and its need to restructure, others have criticised the company for its insensitive approach to the announcement. CEO Jennifer Tejada attempted to assuage the concerns of those affected by the layoffs, but her comments have been met with some criticism.
Overall, the layoffs at PagerDuty are indicative of the changing economic landscape as a result of the pandemic. Companies are having to make difficult decisions in order to remain competitive and survive the current economic climate. While the layoffs are unfortunate, they are a necessary part of the restructuring process for the company.
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