New Relic is laying off 160 employees -- or roughly 7 percent of its workforce -- as the cloud and on-premises IT monitoring software provider pivots aggressively towards a new product pricing model.
New Relic, led by CEO Lew Cirne, rose to fame with application performance monitoring (APM) software for cloud and on-premises systems. The company diversified into mobile and infrastructure monitoring. The company's overall New Relic One offering is positioned as an "observability" platform.
Initially, New Relic disrupted traditional IT management and monitoring systems from the likes of CA Technologies (now owned by Broadcom) and BMC Software. But more recently, New Relic itself has been disrupted in some ways by fast-growth cloud monitoring software providers like Datadog.
Entrenched rivals such as Cisco AppDynamics, Dynatrace and SolarWinds also remain in the mix. And upstarts such as Scout APM are seeking to gain stronger market footing.
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New Relic: Business Warning Signs
New Relic's business challenges started to surface in August 2019 amid slowing growth. Multiple New Relic executive changes arrived in September 2019.
Now, New Relic is restructuring. In an SEC filing, the company disclosed plans to cut roughly 120 employees in the United States, and up to 40 internationally. The restructuring plan will trigger charges of roughly $13 million to $16 million, New Relic said.
Still, there are signs that New Relic's new pricing program is gaining momentum. The evidence: Total revenue, annual recurring revenue, and other financial metrics will be slightly stronger than previously expected for the quarter ended March 31, 2021, New Relic said in that April 6, 2021, SEC filing.
