Yesterday, GoDaddy (NYSE:GDDY) CEO Aman Bhutani sent an e-mail message to the company’s employees. Unfortunately, it was a notification that GoDaddy will reduce its headcount. Still, GDDY stock managed to stay above the breakeven level this morning.
GoDaddy is based in Arizona and provides cloud-based services. The company is best known for offering domain name registration and web hosting.
In late January, GoDaddy disclosed its appointment of two new directors to the company’s board. With that, some investors might have assumed that GoDaddy was in expansion mode.
However, yesterday people learned that the company is actually shrinking. Bhutani informed GoDaddy’s employees through an e-mail message that some of them will be leaving the company, and that message is now publicly accessible through a press release.
According to the chief executive, GoDaddy plans to reduce its global team by approximately 8%. Bhutani seemed to suggest “slower growth in a prolonged, uncertain macroeconomic environment” is the reason for GoDaddy’s workforce reduction.
What’s Happening With GoDaddy Layoffs?
Even though the news of imminent job cuts might bother some financial traders, GDDY stock didn’t drop in early-morning trading today. In fact, it was actually slightly up as of 10:30 a.m. Eastern.
It’s interesting that the market didn’t have a negative reaction to GoDaddy joining the “Tech Layoff Club.” Perhaps Wall Street has become accustomed to publicly traded technology businesses implementing layoffs. Also, investors might consider GoDaddy’s workforce reduction as a positive event, as it should help the company cut down its expenditures.
Bhutani’s message also announced that the company’s Media Temple and Main Street Hub brands will be transitioned into the GoDaddy brand. However, the 123 Reg brand “will continue as a customer-facing brand.”
Finally, the CEO stated GoDaddy will have a “Town Hall” tomorrow, in which the company “will share more context on these changes.” So, GDDY stock traders should be on the lookout for that and for any other material events impacting GoDaddy.
On the date of publication, David Moadel 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.