Cybereason Lays Off 10 Percent Of Workforce After Recently Filing For IPO
‘As the bullish tech market conditions have turned and the tech IPO market has essentially closed, companies like us must now exercise more strict financial discipline and prioritize profitably over top line growth’ Cybereason says.
Another cash-rich cybersecurity startup is laying off workers amid worsening market conditions around the globe.
A week after cloud-security firm Lacework laid off 20 percent of its workforce, endpoint-security firm Cybereason is laying off about 10 percent of its workforce, the company confirmed in a statement this morning. The company has 1,340 employees total, according to LinkedIn.
Cybereason’s move comes only four months after it confidentially filed for an IPO and less than a year after it raised an additional $325 million in funding.
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“This was an extremely difficult decision,” the company said in a statement. “As the bullish tech market conditions have turned and the tech IPO market has essentially closed, companies like us must now exercise more strict financial discipline and prioritize profitably over top line growth.”
The statement added: “Our market traction remains strong as we continue to build a company that matters with long-term objectives in mind and plans for a tremendous outcome when the markets – and we – are ready.”
The layoff news at Cybereason, which is based in Tel Aviv , Israel and Boston, is just the latest sign of a quickly deteriorating market for tech companies in general and some cybersecurity startups in particular.
Last week, San Jose, Calif.-based Lacework announced it was also cutting its workforce by 20 percent, blaming a “seismic shift” in the private and public markets. Lacework’s moved came less six months after it raised $1.3 billion in new funding.
Cybereason’s layoffs come less than a year after it raised $275 million in July 2021 and another $50 million last fall.
Cybereason’s layoffs, which were first reported by the Israeli publications Calcalist and Globes, come only four months after it confidentially filed with the SEC for an initial public offering, as Reuters reported at the time. The company filing valued Cybereason at $5 billion.
But since that filing, the markets have nosedived, with tech stocks getting crushed and the IPO market drying up fast.
Calcalist and Globes report Cybereason is now laying off about 100 workers, with dozens of cuts in Israel and the rest in the U.S. and Europe.
Cybereason’s payroll move clearly shows it is entering an austerity phase, as are other startups, in an attempt to preserve as much cash as possible should the economic picture grow worse across the globe.
Many investors remain highly optimistic about the long-term future of the cybersecurity market, saying recent high-profile cyberattacks and government regulations are prompting companies to beef up security.
Meanwhile, Y Combinator, the Silicon Valley-based startup accelerator, warned company founders late last month that they better “plan for the worst” when it comes to rough economic times ahead.
Cybereason has some heavy-hitter investment backers, including SoftBank, Google Cloud and a private equity firm headed by former U.S. Treasury Secretary Steve Mnuchin.
Since its founding in 2012, Cybereason, which competes against companies such as Crowdstrike and SentinelOne, has raised about $700 million in funding.