Is Cybereason Laying Off Employees? In April 2023, Cybereason had to make tough decisions as it conducted two significant layoffs. These layoffs led to over 300 employees leaving the company. Despite these cuts, they still have around 1,000 employees.
These layoffs were primarily aimed at streamlining the company’s expenses. It was refocusing on core products and adapting to anticipated macroeconomic changes. Before these layoffs, Cybereason explored options like a sale or an IPO.
Stay in the loop for more details about these layoffs. But before delving into it, let’s shed light on the company’s overview.
Cybereason is a cybersecurity company offering computer security software. It was founded in 2012 by Lior Div, a former Israel’s Unit 8200 member in Delaware, USA. In 2014, the company established its main headquarters in Boston. Later, it expanded its global presence with a subsidiary in the UK in 2016. Cybereason also has offices in key global locations such as London, Tokyo, and Tel Aviv.
Their product portfolio includes an advanced endpoint protection platform encompassing antivirus software, endpoint detection, response capabilities, and various managed services. In 2017, Cybereason launched “Malicious Life.” It was an engaging podcast recounting the history of cybersecurity. During the same year, they inaugurated an office in London, England.
Cybereason boasts a dedicated security research division known as Nocturnus. This specialized team excels in discovering cyberattack methods and system vulnerabilities. Notably, Nocturnus made history. It developed a defense strategy against the 2017 NotPetya. Along with Bad Rabbit cyberattacks, solidifying its position as a cybersecurity leader.
In April 2023, Cybereason implemented two significant rounds of layoffs. It led to the departure of over 300 employees. Despite these cuts, the company continues to employ approximately 1,000 individuals. These layoffs were executed to streamline the company’s expenditure structure. Also wants to focus on core products and adapt to expected macroeconomic changes.
However, the primary driver behind Cybereason’s actions was the postponement of its IPO. It prompted the company to pursue additional funding actively, even if it meant doing so at almost any cost.
In a recent funding round, Cybereason successfully secured $100 million. Notably, the company had to amend its valuation expectations. So that it can align with the new market conditions. Investors are assessing Cybereason at lower multipliers, typically around 5 or 7 times its revenue. This adjustment reflected the financial challenges that Cybereason faced within the current economy.
In June 2022, Cybereason also decided to lay off 10 percent of its workforce. This move was made shortly after having confidentially filed for an IPO. This move followed a similar trend in the cybersecurity sector.
Cybereason boasted a total employee count of 1,340 last year. It had raised an additional $325 million in funding less than a year before these layoffs. The company acknowledged the difficulty of this decision. The bullish tech market had shifted, and the tech IPO market had closed. Consequently, Cybereason had to adopt a more stringent approach to financial discipline. Or to prioritize profitability over top-line growth.”
Cybereason’s statement focused on their commitment to long-term goals, it stated. “Our market traction remains strong as we continue to build a company that matters with long-term goals. Besides, when the markets and we are ready, we plan for a tremendous outcome.”
Cybereason’s layoffs came less than a year after the company raised $275 million in July 2021. It was followed by an additional $50 million last fall. These developments occurred within four months of Cybereason’s filing for an IPO. It is valued around $5 billion, as reported by Reuters.
However, market conditions quickly declined. The IPO market is rapidly drying up as the tech stocks face significant declines.
In October 2022, Cybereason announced another round of layoffs. At that time, the layoff affected approximately 200 employees, as reported by Calcalist. This reduction accounted for roughly 17% of the company’s workforce. This layoff round was conducted four months after Cybereason initiated layoffs in June 2022. It abandoned its near-term IPO plans, which had aimed for a $5 billion business valuation.
In response to the layoffs, Cybereason stated Calcalist. It acknowledged the difficulty of this decision. Despite these difficulties, Cybereason highlighted that the demand for their technology remains strong. They remain committed to building an independent global company with long-term strategic goals.
The final line of their statement emphasized Cybereason’s independence. It addresses rumors circulating about the company being up for sale.
Not only Cybereason but other cybersecurity firms also announced significant layoffs. These companies made this move to adapt to changing circumstances.
It is noted that Cybereason blamed a few factors behind this layoff decision.
- Market conditions
- Strategic reorganization
- Shifting priorities
Investments Become Scarer
Cybereason counts notable investors among its backers, including SoftBank’s Vision Fund, Google Cloud, and Liberty Strategic Capital. However, SoftBank Group, a well-known venture capital firm, faces significant challenges. Substantial financial losses and a wave of executive departures marked it.
In recent months, the valuations of many startups have taken a hit. Some investors have shifted their focus from prioritizing hyper-revenue growth. So that they can seek more reliable profit growth, this shift in investor sentiment has made it tougher for growth-oriented startups as they contemplate the path to going public.
Furthermore, the rising trend in interest rates and persistent high inflation have added pressure to startup valuations and merger and acquisition (M&A) deals.
These economic challenges aren’t limited to startups alone. They’ve also affected major technology giants. Earnings reports and less-than-optimistic financial forecasts from Microsoft and Alphabet have further shaken investor confidence. These developments occurred on October 25, 2022, contributing to the overall economic turbulence in the tech industry.
Cybersecurity Jobs Are Still Strong
While specific cybersecurity vendor companies are reducing their workforces, the overall job market for cybersecurity professionals remains robust. It offers hope for those who have been laid off. Businesses are seeking cybersecurity experts, with the workforce expanding by 6%. It reached around 1.34 million in North America over the past year. This is reported by (ISC)2, a cybersecurity professional organization.
Furthermore, job listings for tech positions, in general, have surged by 49% above pre-pandemic levels on job site Indeed.com as of October 21.
This sustained shortage of cybersecurity talent and the increasing adoption of cloud services drive more organizations toward acquiring cybersecurity expertise. (ISC)2 anticipates greater adoption, particularly among smaller businesses. They may need more resources or a budget for a permanent on-site cybersecurity team.
Clar Rosso, CEO of (ISC)2, stresses the importance of organizations. It maintains its cybersecurity focus, even amid economic pressures. She emphasizes that the demand for cybersecurity skills remains high. Rosso warns that bad actors and cyber threats won’t diminish. If economic conditions worsen, the threat landscape may become even more challenging during difficult times.
Other Cybersecurity Companies That Laid Off Recently
As we know, no sector has been left unscathed in this layoff trend. Similarly, numerous cybersecurity companies laid off employees this year.
Let’s put light on these companies:
Sophos confirmed in mid-January that it would be laying off 10% of its global workforce. It amounted to around 450 job losses. This move is aligned with the company’s shift to focus more on cybersecurity services, including managed detection and response.
Around the same time, identity verification firm Jumio also announced layoffs. The company revealed that it would be letting go of approximately 100 employees.
In May 2022, Lacework, a cloud security company, terminated 300 jobs. This equated to roughly 20% of its workforce.
OneTrust specializes in privacy, security, and data governance technology. It also laid off nearly 1,000 employees, representing about a quarter of its workforce.
IronNet is a cybersecurity firm founded by former NSA director Keith Alexander. It faced substantial challenges and had to lay off 17% of its staff in June, followed by another 35% in September.
Aqua Security, a cloud security firm, decided to lay off 10% of its workforce.
Malwarebytes laid off 14% of its staff, equating to around 125 employees.
Gen Digital was formed by merging antivirus companies Avast and Norton LifeLock. It also had to lay off a quarter of its employees, often due to overlapping roles.
In October 2022, Snyk, valued at $7.4 billion, initiated a restructuring process. It affected around 198 employees, or 14% of its total workforce.
Similarly, security and application delivery solutions provider F5 announced layoffs. It laid off approximately 100 positions, which amounted to 1% of its global workforce.
Other affected cybersecurity companies include:
Tripwire, Deep Instinct, Pipl, Transmit Security, Tufin, Checkmarx, Varonis, Perimeter 81, Armis, and Forescout Technologies
Interestingly, while many employees faced layoffs, the cybersecurity industry as a whole is experiencing growth. A nonprofit (ISC)² study revealed the cybersecurity workforce is at an all-time high globally. It is estimated that 4.7 million professionals.
However, the study also identified a significant gap. Indicating a need for an additional 3.4 million cybersecurity workers. In a survey by the nonprofit, 70% of 11,000 cybersecurity professionals expressed. Their organizations needed a sufficient number of cybersecurity employees. This underscores the ongoing demand for skilled cybersecurity talent instead of layoffs in some companies.
Cybereason announced several rounds of layoffs so far. Recently, it laid off over 300 employees. It reflected the challenges faced by tech companies in today’s volatile market. The postponement of their IPO forced them to secure additional funding. It adapted to new valuation multipliers.
This trend is common, as other cybersecurity firms have also trimmed their workforce. This move has taken due to evolving market conditions. However, the broader cybersecurity job market remains robust. It offered hope for those affected by these layoffs. Because cybersecurity’s demand is expected to grow continuously. Businesses seek to bolster their defenses. They are emphasizing the importance of maintaining vigilance amid evolving cyber threats.