We’re nearing the end of earnings season and 13-F filing season is underway, but what this year can really been characterized as is layoffs season. Today, DocuSign (NASDAQ:DOCU) is the latest company to announce another round of significant job cuts. And, like so many companies who have undertaken cost-cutting measures of late, news of DocuSign layoffs has sent DOCU stock rocketing higher, up more than 3% at the time of writing.

This time around, DocuSign will be removing around 700 positions, or roughly 10% of its workforce. This move follows another round of job cuts in September, which amounted to roughly 9% of its total employee base at that time.

Thus, this is a playbook DocuSign appears to be coming back to. For tech giants that are looking to become more profitable, it’s a move Wall Street and investors are cheering. Accordingly, the positive stock price move we’re seeing today may be an expected outcome.

Let’s dive more into what led to these job cuts, and what investors should make of the news.

DocuSign Layoffs Lead to Impressive Stock Price Move

Like many of its peers, DocuSign clearly overstaffed following a pandemic-driven boom. E-signature demand surged as folks scrambled to find a solution to signing documents remotely. While wet-ink signatures are still a thing, it’s clear that Covid-19 drove a shift in support for digital signatures.

Accordingly, with the end of the pandemic uncertain at the time, staffing up to handle this surging demand seems to have made sense at the time.

That said, as the economy now returns toward a more normal state, DocuSign is apparently looking to right-size its operations. This certainly makes sense, considering the fact that the company likely over-hired. DocuSign’s overall labor force roughly doubled as a result of the pandemic. Thus, there were likely a few positions that were created that didn’t need to be. Now, the company is addressing its bloat.

As investors search for high-efficiency (and high-growth) tech stocks that will thrive in the coming years, companies that ensure they’re appropriately staffed may outperform. That’s DocuSign’s thesis, and it appears to be playing out as expected.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.