While the cybersecurity market is seeing rapid growth, numerous vendors in the industry have disclosed major cutbacks as part of retooled investment strategies.
Layoffs Hit The Cybersecurity Industry
While generally more resilient than vendors in many sectors of IT, cybersecurity companies haven’t been spared from job cutbacks over the past two years. The list of security vendors that’ve disclosed major rounds of layoffs at some point during the economic upheaval that began in 2022 has gotten lengthy. Unfortunately, during the first quarter of 2024, the list grew lengthier.
In several cases, recent layoffs have affected staff at high-profile cybersecurity companies including Proofpoint and Okta. They have joined a list of top cybersecurity vendors that have cut staff over the past two years that also includes Splunk, Sophos, Zscaler and Rapid7.
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While eliminating staff, cybersecurity executives have characterized the layoffs as the right decision for the health of their companies over the longer term, allowing them to shift spending to larger areas of opportunity.
For employees at cybersecurity companies who’ve recently been impacted by layoffs, it’s a difficult event — but potentially also an opportunity for security vendors that are hiring. And notably, cybersecurity remains a fast-growing industry, with total spending expected to reach $215 billion in 2024, up more than 14 percent compared to last year, according to Gartner.
What follows are details about cybersecurity companies that’ve disclosed layoffs in Q1 of 2024. CRN will update this list on an ongoing basis.
Orca Security Cuts 15 Percent Of Staff
In early January, Orca Security confirmed that a round of layoffs will impact 60 employees. That equates to 15 percent of the cloud security unicorn’s employees.
“Since Orca Security’s founding, a key guiding principle has been growing responsibly and profitably,” the company said in a statement provided to CRN. “Based on the current macroeconomic conditions, we made the difficult decision to say goodbye to a number of our colleagues across the company.”
The cloud security firm plans to “announce updates on our go-forward strategy in the coming weeks,” the statement said.
In October, top executives at Orca Security disclosed their aspirations for the company to grow into a candidate for going public in coming years. Orca — which expected “triple-figure growth” in 2023 — has been aiming to build “a long-lasting company that hopefully in the years to come will also go into an IPO,” Orca Co-Founder and CEO Gil Geron told CRN at the time.
Orca most recently received a valuation of $1.8 billion in 2021, in connection with its $550 million Series C funding round. Last year, the company unveiled a new channel strategy that includes a commitment to generate 100 percent of its revenue with the help of partners.
Veeam Layoffs Hit 300
Data protection and management software developer Veeam disclosed in mid-January that it’s in the process of a round of layoffs affecting 300 employees in sales, marketing and administrative capacities. Veeam, which has been increasingly focused on having its offerings included as part of a customer’s cybersecurity strategy, said in a statement that 2023 was the company’s “best ever year in terms of market share.”
However, “like any successful company, during annual planning Veeam makes decisions to prioritize investment areas reflecting the evolution of the business and the market,” said Matthew Bishop, Veeam’s chief operating officer, in the statement. “We’re ramping up hiring in some areas, transitioning some roles to new teams and retiring other roles.”
Veeam plans to hire nearly 500 new engineering and development roles in 2024, the company said.
Jamf Layoffs Impact 6 Percent Of Staff
In late January, Jamf disclosed that a round of layoffs will impact 6 percent of its employees as the company pursues “profitable growth.”
Jamf, a maker of device management and security tools for Apple devices, disclosed the cutbacks in a filing with the U.S. Securities and Exchange Commission Thursday.
The company did not specify the number of employees that are expected to be let go. Jamf most recently reported its headcount as of the end of 2022, when the company employed 2,796.
If its staff size has remained similar, the 6-percent workforce reduction would affect roughly 170 Jamf employees. A Jamf spokesperson said that this figure is “approximately accurate” for the number of affected staff members.
In the SEC filing, Jamf said that the enactment of its “workforce reduction plan” is “intended to reduce operating costs, improve operating margins, and continue advancing the Company’s ongoing commitment to profitable growth.”
Proofpoint To Lay Off 280 Employees
Proofpoint disclosed on Jan. 31 that a round of layoffs will impact 280 employees. The news was first reported by Calcalist, which indicated that the layoffs amount to about 6 percent of Proofpoint’s worldwide staff of 4,500.
“In order to position Proofpoint for continued and long-term success as a world-class business operating at scale, we have made the difficult decision to reduce our current workforce by about 280 positions globally,” Proofpoint said in a statement provided to CRN.
Proofpoint, a major provider of email security and data protection tools, said in the statement that the layoffs come as part of a “forward-looking company strategy of aligning our investments and hiring to our strategic priorities.”
This strategy includes an effort by the private equity-owned company to utilize a “global talent pool” as well as “streamlining our organization with fewer management layers,” Proofpoint said.
“By the middle of 2024, we anticipate nearly half of the eliminated positions will be transitioned to our global centers in Ireland and Argentina,” the company said in its statement. “Coupled with continued hiring aligned with our key priorities, we expect to end 2024 with a similar headcount to where we started the year.”
The move comes two months after Proofpoint named a new CEO. Sumit Dhawan, formerly the president of VMware, was named Proofpoint’s new chief executive in late November.
Okta Cuts 400 Jobs
Okta told employees Feb. 1 that it has eliminated 400 full-time jobs as part of a “restructuring plan,” representing 7 percent of its staff.
The new round of layoffs comes a year after Okta disclosed it was cutting 300 employees, which had represented 5 percent of the identity security vendor’s global workforce at the time.
“In order to grow profitably, we need to run the business with greater efficiency. While we’ve taken steps in the right direction, the reality is that costs are still too high,” Okta Co-founder and CEO Todd McKinnon wrote in an email to employees.
“We need to be mindful of our overall spend so we can continue to invest in the areas, products, and routes to market with the most opportunity,” he told staff. “To capture our massive potential and build an iconic company, we must be thoughtful about where we place our bets. This action is a proactive measure to help set the company up for long-term success.”
“To the impacted employees, I am deeply sorry and we thank you for your many contributions,” McKinnon added in the email.
Okta has also recently faced challenges as a result of a high-profile support system breach, which included the theft of all support customer names and emails. The incident, which was the second major breach for Okta in two years, has had the potential for damaging the company’s business, Wall Street analysts have suggested.