Tech industry layoffs continue. The company GitHub, which is owned by Microsoft, announced today that it will be letting go of 10% of its workforce through the end of its fiscal year. GitHub had about 3,000 employees prior to this announcement, which was first reported by Fortune. Additionally, the business will transition to a remote-first culture and close all of its offices when their leases expire, in part due to the underutilization of those locations.
In order to “protect the short-term health” of its business, GitHub will also maintain the hiring moratorium that it first announced in January and implement a number of other internal changes.
“We announced a number of challenging but necessary choices and budget realignments to both safeguard the future viability of our company and enable us to fund our long-term strategy. You can read our CEO’s full letter to staff, which includes more information on these changes, below, according to a company spokesperson.
GitHub is also switching to Teams for its video conferencing needs, which is an unorthodox move for a company that has prided itself on remaining independent of its corporate owner. Additionally, it is extending its laptop refresh cycle from three to four years as a further sign of cost-cutting measures.
“Even though our entire leadership team thoughtfully discussed this move and reached consensus, as CEO I ultimately have the final say. We will approach this time with the utmost respect for every Hubber, I understand this will be challenging for you all, GitHub CEO Thomas Dohmke wrote in an email to the company’s staff today.
He says that with a strong emphasis on AI, he wants the business to become the “developer-first engineering system for the world of tomorrow.” That might not be shocking given GitHub’s recent emphasis on its Copilot and Microsoft’s general shift toward AI-everything.
Here is the full email Dohmke sent to the company earlier today:
GitHub CEO Message to Employees on February 9, 2023
Today, we are announcing a number of difficult decisions, including saying goodbye to some Hubbers and enacting new budgetary realignments, designed to protect the short-term health of our business while also granting us the capacity to invest in our long-term strategy. With great respect for Hubbers, I first want to be clear about why we are making these decisions and what it means for GitHub’s future.
Sustained growth is important for every business. For GitHub, this means that we continue to enable more productive developers across the globe and move quickly as our opportunities to help our customers change. Today, we are the home of 100M developers, and we must become the developer-first engineering system for the world of tomorrow. The age of AI has started and we have been leading this change with GitHub Copilot, our most successful product launch to date. We have an enormous opportunity to build an integrated, AI-powered GitHub with urgency. We must continue to help our customers grow and thrive with GitHub, expedite and simplify their cloud adoption journey, while supporting them every day. This will require strong focus and changes to how and where we invest our finite resources.
To start, we will align our work with the areas where we can best impact these goals and our customers’ needs across all of our products. Unfortunately, this will include changes that will result in a reduction of GitHub’s workforce by up to 10% through the end of FY23. A number of Hubbers will receive notifications today, others will follow as we are re-aligning the business through the end of FY23. The hiring pause that I announced on January 18 remains in effect.
Although our entire leadership team has carefully deliberated this step and come to agreement, ultimately, as CEO the decision is mine. I recognize this will be difficult on you all, and we will approach this period with the utmost respect for every Hubber. We will speak with impacted Hubbers so that they understand the transition compensation and COBRA/COBRA equivalent (outside the US) that will be provided. Career transition services assistance benefits will also be offered.
Additionally, we have been working to improve our operational efficiency and scale as a business. One of our decisions is to move toward a fully remote GitHub. We are seeing very low utilization rates in our offices around the world, and this decision is a testament to the success of our long-standing remote-first culture. We are not vacating offices immediately, but will move to close all of our offices as their leases end or as we are operationally able to do so. We will share more workplace details and transition plans with you as they are finalized.
We are looking at further reducing our operating costs. We will share details and transition plans with you in the coming months, but I wanted to share two decisions with you: i) Effective immediately, we will be moving laptop refreshes from three years to four years. ii) We will be moving to Microsoft Teams for the sole purpose of video conferencing, saving significant cost and simplifying cross-company and customer conversations. This move will be complete by September 1, 2023. We will remain on Slack as our day-to-day collaboration tool.
Finally, I want to extend my deepest gratitude to every single Hubber and their incredible talents that have helped GitHub grow to where we are today. Every commit you have made and every day you have worked has helped construct GitHub into the largest and most important software development platform. Thank you for your dedication, resilience, and passion to empower millions of software developers around the globe.