Why is there Lacework Layoffs in 2023? Lacework has laid off 20% of its workforce. It happened a few months after two record-breaking investment rounds raised the company’s value to $8.3 billion. A spokesman has not confirmed the number of employees who are affected. He also stated to The Register that the “reported Twitter number is a significant exaggeration.” Four months after Lacework’s employees were laid off, David “Hat” Hatfield left his position as co-CEO.
Lacework, Inc does software development. The business provides customers using AWS with a cloud security platform that automates security and compliance controls. Lacework serves customers throughout the United States. Let us learn in detail about the company in this article.
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A cloud security platform is offered by Lacework Inc. (Lacework). Their platform enables security teams to locate and secure cloud and data center workloads without manual tagging, rules, or policies. The organization creates data center polygraphs to identify people, workloads, apps, and their interactions.
Users may record and recognize behavioral changes in data centers using Lacework’s time machine. It also keeps track of every activity to uncover data breaches. The business also provides auditing, forensics, breach detection, and user attribution, in addition to developing polygraphs. Through the Polygraph Data Platform, it offers services. Mountain View, California, in the US, serves as the headquarters of Lacework.
New workloads have moved to the cloud at an accelerated rate during the past ten years. With the growing use of cloud computing, organizations can grow and scale more than before. Since there are so many more workloads running in the cloud than in the on-premises period, there is a drawback to the widespread use of the cloud: a larger attack surface.
History of Lacework
Major cloud providers, such as AWS and Azure, offer security for the infrastructure layer. Yet, any customer that switches to the cloud must secure the workloads, operating systems, and apps that operate on their preferred cloud. Companies like Lacework that assist customers in securing their workloads have much to gain from this second layer above the cloud providers.
This dynamic has caused a sudden increase in demand for cloud security solutions. In 2022, it is predicted that spending on cloud infrastructure security will be close to $172 billion. According to Gartner, customers will be at fault for over 90% of cloud security failures.
Through at least 2023, This makes it more important than ever for businesses to ensure that their security policies are followed. Also, customer data is protected.
A broad security solution called Lacework aids in the security of companies. Meanwhile, they develop hybrid or private clouds and public clouds like Amazon Web Services, Microsoft Azure, and Google Cloud Platform. On a single platform, Lacework offers visibility into risks and vulnerabilities throughout the cloud environment of a business. Investors have been drawn in because of the enormity of the market opportunity. Therefore, Lacework raised the largest fundraising round in the history of the cybersecurity sector.
In 2015, Mike Speiser, Sanjay Kalra, and Vikram Kapoor established Lacework. Former creator of Pure Storage and current managing director of Sutter Hill Ventures, Mike Speiser is a member of the Lacework board of directors. He co-founded Snowflake in 2012, which is another notable accomplishment.
Lacework is a well-funded cybersecurity startup. In 2022, it announced a significant round of layoffs amid concerns about a wider economic recession.
Lacework revealed in a statement given to Protocol that 20% of its staff members were laid off due to a “decision to restructure our business.” The number of total layoffs was not made public by the company. As of March 2022, Lacework had more than 1,000 employees.
The cloud security provider stated in a blog post from May 2022 that “Today, we made the toughest decision to say goodbye to some of our colleagues.” It was done as part of a restructuring and changes to the company’s plan.
The business has made much effort to provide people affected with severance. It covers compensation, healthcare benefits, and access to outplacement support. They will support them in any way as they pursue possibilities outside of the company. The business said these things in a blog post by co-CEOs David Hatfield and Jay Parikh.
Since its debut in 2014, Lacework has raised $1.85 billion in investment, most of which was revealed in 2021. In January 2021, the company said it would raise $525 million. It was then followed by $1.3 billion in November 2021, which resulted in an astounding $8.3 billion valuation.
Lacework hailed the fundraising effort as “the largest funding round in security industry history.” According to CB Insights, the company has one of the third-largest valuations among privately held security firms.
According to the business, in 2021, its customers will have increased by 3.5 times. Between the significant finance and the company’s quick growth, Lacework hired people in 2020, increasing its workforce from 200 in January 2021 to more than 1,000 in March.
The co-CEOs wrote in the post that “over the past few weeks and months, an abrupt change took place in both the public and private markets.” “We have a duty to control how we run our business and make changes as necessary.” This was best to position the company for sustained and long-term success.
The co-CEOs wrote in the post that “demand for cloud security will remain strong, and it is essential to all online and cloud enterprises.”
Despite the changes, Parikh told his staff that he wanted to build a company with a recurring income of more than $1 billion annually. That is nearly 20 times its size now. The information stated in June that Lacework’s yearly recurring income at the end of 2021 would have exceeded $50 million.
Reason for Layoffs
Yet, that year, Lacework became the first cybersecurity victim of the economic slump. This was when it was revealed in May that the company had let go of 20% of its workforce to strengthen its balance sheet linkedIn claims that the company has reduced its staff, with lower losses in engineering and an increase in the IT workforce during the past six months. The firm’s headcount cutbacks are most obvious in its marketing and sales departments.
In an email to staff then, Hatfield and Parikh stated that “we have adjusted our plan to increase our cash runway through profitability.” They improve the balance sheet to be more opportunistic about investment opportunities and weather volatility in the market.
The top-line growth for Lacework has been astronomically high. The company’s corporate endpoint security sales climbed by 200% in 2021 to $102.1 million. Also, its market share in cloud workload security has also increased by 260 basis points. Still, Lacework trailed five other competitors in the cloud security industry with a market share of 4.7% and 20 other vendors with a market share of 1% in endpoint security.
Unlike other cloud security businesses, Lacework can spot spikes in unusual activity that can be used to uncover elusive attacks and zero-day flaws. In August, senior director of product marketing Kate MacLean disclosed this information. According to MacLean, Lacework contextualizes, connects, and regulates as much data as possible. This was done to establish a baseline for how an environment generally functions.
The correct plan is in place, and we have the funds to support our aim, Parikh wrote in a post. “We must keep assembling the best team possible and carry out our tasks precisely and cooperatively. If our plan had been simple, it would have already been completed. The path to success needs to be well-paved and straight.