New Relic will lay off up to 160 in restructuring

Software company New Relic, one of Portland’s largest technology employers, said Tuesday it will lay off nearly 160 employees across the company as revenue growth continues slowing and losses accumulate.

The job cuts amount to approximately 7% of New Relic’s workforce, based on its most recent tally of total employees. The company attributed the layoffs to a changing business model, as New Relic moves away from its prior focus on selling its software through a subscription.

“In furtherance of this strategy shift, the company intends to reallocate some spending to increase its investment on research and development,” New Relic said in a regulatory filing Tuesday. The company said it will cut nearly 120 jobs in the U.S. up to 40 more internationally.

Also Tuesday, New Relic said revenue in its fiscal fourth quarter was “slightly above” the $166 million to $167 million it forecast last winter. Pro-forma losses were also a little below forecasts, the company said.

New Relic’s headquarters are in San Francisco but it runs its engineering operations from a large office in downtown Portland, where it employs about 600 of its roughly 2,100 workers.

New Relic’s software helps organizations track activity on their website to gauge the performance of their online products and services. The rapid growth that characterized the company’s early years has cooled considerably.

The company’s sales grew approximately 11% last year, according to Tuesday’s preliminary results, down from 25% growth the prior year and 35% the year before that.

Losses, meanwhile, are rising sharply. New Relic lost $40.1 million in 2019, $88.9 million in 2020 and $131.0 million in the first nine months of fiscal 2021.

New Relic overhauled its pricing and product line last summer, an effort the company said would simplify its product line and make its products more appealing.