Adverts
Cybersecurity companies have laid off many workers in recent months as concerns grow that an economic downturn will delay funding rounds and reduce the amounts investors are willing to commit.
Since mid-year, cyber resources and technology providers across the industry have been laying off staff, sometimes in multiple rounds of cuts to their workforces. The layoffs spanned departments including sales, advertising, analytics, and construction and technical functions.
Cybersecurity is seen by some as particularly insulated from economic crises, as hacks continue to plague companies of all sizes and from the billions of dollars invested in early-stage corporations. However, cybersecurity companies regularly spend money at high prices, analysts say.
informative report
WSJ cybersecurity professional
Cybersecurity news, analysis and insights from WSJ's global group of journalists and editors.
Cybereason Inc., a Boston-based startup that planned an initial public offering in 2022, said in June it would lay off about 140 people, or about 10% of its staff. Then in October it made further cuts of around 17%. Cybereason declined to comment beyond its Oct. 26 blog post discussing restructuring and further cost cuts in areas such as advertising and marketing.
In August, email protection company Malwarebytes Inc. laid off about 125 people, or about 14% of its international staff, a spokesperson said. Marcin Kleczynski, the company's chief government officer, described the cuts in a press release as a reorganization of the company to focus on its fastest-growing areas, which include partnerships with managed services providers and utility comparable to its security detection platform. scratchs.
Application security vendor Snyk Ltd., which introduced US$196.5 million in billing G financing on December 12, also cut 14% from its headcount. The startup is now valued at US$$7.4 billion – about 12% lower than when it raised funds in September 2021. Snyk declined to comment beyond a company blog published on October 24 discussing the cuts.
Other companies that have reduced headcount in recent months include cloud security vendors F5 Inc. Aqua declined to comment on a Dec. 5 memo to government chief Dror Davidoff's staff stating layoffs that would affect 10% of its workers.
Even internal security teams at big tech companies have not been spared – Patreon Inc., a crowdfunding platform, laid off around 17% of its workforce in September, along with the five participants at its security firm. A Patreon spokesperson pointed out that the trade has become “part of a long-term strategy to continue distributing security tasks across our engineering team and bring new areas of talent to Patreon internally.”
Fears of a recession and the effects of corporate moves similar to mergers and acquisitions have spooked agencies across industries, many of which have enacted sweeping staff cuts. Fb parent Meta Platforms Inc. Commented in November, will lay off eleven,000 people.
Headcount is regularly the main area where companies can make cuts to ensure they remain solvent, unless funding is secured, said Mark Sasson, co-founder and managing partner of community recruitment firm Pinpoint Search, which focuses on cybersecurity.
Early-stage companies have become familiar with easily available financing in contemporary years. However, they are now being warned by their investors that their subsequent rounds may be delayed – and may not be as big as they had hoped.
“Pandemic-era extremism has led to too much cash that they were able to carry, and about the massive burning of cash they should be more cautious,” said Dave DeWalt, founder and managing director of mission capital firm NightDragon LLC.
Share your thoughts
How would a layoff at one of your cybersecurity vendors affect your method of protection? Join the dialog below.
the vast majority of cyber workers laid off so far are not in technical roles, pointed out Allie Mellen, an analyst at Forrester Analysis Inc. Large, financially strong companies that don't even need half of the layoffs, or actually want to hire through it,” she noted.
Pinpoint is receiving different queries per day from cybersecurity officials of all stages who have been fired or anticipate being fired, Sasson pointed out.
Sumo Common Sense Inc., a publicly traded cloud-based records and analytics company, is one company that used the turmoil as a chance to introduce clean skills. The company has employed about 15 people in its security department during the past 12 months from groups that have laid off workers or closed, said George Gerchow, Sumo's security director.
“There were a ton of startups that are no longer there. Basically, it helped more mature advertising agencies, like ours, to achieve this skill”, he said.
