New Relic Layoffs Hitting Hundreds of Workers in U.S., Internationally

New Relic layoffs are impacting over 200 employees globally, including some channel-related roles, as part of a restructuring plan.

Bill Staples, New Relic’s CEO, announced the layoffs in a blog. According to a U.S. Securities and Exchange Commission (SEC) filing, the restructuring plan expects a reduction of the company’s workforce by up to 255 employees, including employees who previously exited in May and early this month as part of the reorganization of specific functions and performance management.

Staples said the New Relic layoffs will impact 155 employees in the United States and up to 57 internationally.

Among those hurt by the layoffs is Damien DeHart, MSP partner engineer team lead.

“After five years at New Relic, I’ve been impacted by a global layoff that occurred today,” he wrote on LinkedIn. “That said, there are a bunch of us looking for new roles. Please let me know what you have available in the sales, customer success, solution consulting/engineering, or product management areas.”

In addition, New Relic let go Nicole Jacobus, senior manager and global partner enablement manager.

Still Hiring, Despite New Relic Layoffs

However, New Relic plans to hire about half of the reduced headcount in targeted areas of the organization to address opportunities for consumption business growth going forward. The company expects to end its fiscal year 2024 with about the same headcount as of the end of fiscal year 2023.

New Relic’s Bill Staples

“Leading up to today, each of our leaders conducted their own rigorous review with me across their respective functions to ensure that every resource will be aligned with our future needs,” Staples 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.”

New Relic has been on a multiyear journey to transition its business into one that not only “brings ubiquity to observability, but does so simply and profitably while sustaining a high growth rate,” he said.

“This goal has served as our north star and we have made tremendous progress together,” Staples said. “As we shared at our analyst day a few weeks ago, our consumption business has been growing above market growth rates, and New Relic now is more broadly adopted than any other observability platform. Last year, we turned a corner toward profitable growth and closed the last fiscal year exceeding $900 million in revenue and over 10% non-GAAP operating margin.”

Exiting its Subscription Business

After three years of steady progress, New Relic is ready to make the final push to exit its subscription business in the next four-to-six quarters, which will simplify the company and create a singular focus on consumption, Staples said.

“It is important to make this change 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,” he said. “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.”