Cybersecurity Upstart Automox Lays Off Workers, Blames ‘Macroeconomic Environment’
Report says as much as 18 percent of the firm’s workforce has been eliminated amid concerns about the overall economy.
The startup layoffs keep on coming within the security sector.
Automox, a Boulder, Colo.-based cybersecurity firm that last year raised $110 million in new funding, is the latest later-stage security startup to announce layoffs amid deteriorating economic conditions.
In a LinkedIn post, the company confirmed this week that it was laying off workers.
“ Today, due to the broader economic climate, we parted ways with a number of our very talented people,” the company said in the post. “While Automox continues to be a growing business in a strong financial position, we are not immune to the challenges of the macroeconomic environment.”
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In its post, the company didn’t disclose the number of people laid off – and company officials could not immediately be reached for comment by CRN.
But Layoffs Tracker reported Automox reduced its workforce by about 18 percent, or 75 employees. A newly created database of laid off employees listed nearly 60 people who apparently no longer work at the firm.
Layoffs Tracker also reported Automox, which was founded in 2015, previously cut its workforce by about 10 percent in April.
Automox’s painful payroll moves are just the latest in a recent string of layoffs at security startups, as the economic waters get choppier, particularly for younger companies trying to preserve cash before a possible downturn hits.
Last week, security vendor OneTrust announced it reduced its headcount by about 950 people, or about 25 percent of its workforce, with CEO Kabir Barday blaming a shift in the capital markets.
Earlier in June, Boston-based Cybereason, which had filed for an IPO after raising $325 million in funding in 2021, slashed 10 percent of its workforce, also blaming overall economic conditions.
Late last month, San Jose, Calif.-based Lacework, which raised $1.3 billion last year, announced it was cutting its workforce by 20 percent.
Other startup executives and industry players have recently told CRN that increasingly nervous investors are informing company founders to batten down the hatches and prepare for possibly tough times ahead.
While startups are pulling back a bit amid declining funding valuations, most industry officials say the cybersecurity sector should remain comparatively strong should a recession hit, due to the high demand for security products and services.
In the case of Automox, it has developed a platform that automates endpoint configuration, patching, management, and inventory, all of which company official say enhances security for customers.
Last year, Automox closed on a $110 million Series C funding round, led by Insight Partners, bringing its total funds raised to more than $150 million. The investment included funds managed by Blackstone and existing investors Koch Disruptive Technologies and early-stage venture firm TechOperators.
As part of the announcement, CrowdStrike’s former CTO, Dmitri Alperovitch, was also appointed chairman of Automox’s board of directors.
It was named by CRN as one of the 10 hottest cloud security startups of 2021.
After this week’s announced layoffs, a number of employees took to social media to say farewell to Automox colleagues.
In the company’s LinkedIn post, it concluded its message to workers: “We greatly appreciate the work, dedication and contributions of those impacted (by the layoffs). Please join all of us at Automox as we open our networks to help these talented individuals find their next opportunity.”