Microsoft-Owned GitHub Cuts 10% Staff, Shutters Headquarters For Fully Remote Setup

Internet hosting service company GitHub announced Thursday that it is cutting its workforce by 10% through the end of its fiscal year. The Microsoft-owned company has also shut down its headquarters in San Francisco Bay Area.

"We announced a number of difficult but necessary decisions and budgetary realignments to both protect the health of our business in the short term and grant us the capacity to invest in our long-term strategy moving forward," a GitHub spokesperson told Fortune.

GitHub CEO Thomas Dohmke also said in a message to staff on Thursday that the company will be implementing a fully remote work setting. "We are not vacating offices immediately, but we will move to close all of our offices as their leases end or as we are operationally able to do so," Dohmke said.

Dohmke said the company was "seeing very low utilization rates" with the physical work setup. The company had 3,000 employees before the workforce reduction news, as per Fortune.

Aside from slashing its workforce and shuttering the headquarters, GitHub has also decided to use Teams for its video conferencing needs as it continues to move towards a 100% remote work setting, TechCrunch reported.

News of the layoffs came about a month after the company announced a hiring freeze in January. On Thursday, Dohmke said the January hiring freeze remains in effect.

Dohmke explained to employees in his message that he envisions the company to become the "developer-first engineering system for the world of tomorrow," adding that it will focus largely on artificial intelligence.

Microsoft acquired GitHub in 2018 for $7.5 billion, reiterating that the tech giant has a "developer-first" mission.

"Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation," Microsoft CEO Satya Nadella said at the time.

Microsoft also said that GitHub would "operate independently" and developers will still have the freedom to choose which programming tools and operating systems they prefer.

In October, Dohmke told TechCrunch that while GitHub remains independent from its parent company, it has received support from Microsoft leadership. He said GitHub and Microsoft are committed to retaining the acquisition's "foremost principle," which is to put the needs of developers first.

GitHub joined Disney and Affirm in laying off employees this week.