Lacework Lays Off 20 Percent Of Staff Six Months After Raising $1.3B
‘We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet,’ said co-CEOs David Hatfield and Jay Parikh.
Six months after raising $1.3 billion in funding and becoming one of the hottest cybersecurity companies in the world, Lacework is now laying off an estimated 20 percent of its workforce.
In a move that stunned both employees and the security industry in general, co-CEOs David Hatfield and Jay Parikh said in a company blog post on Wednesday that they made the “very difficult decision to say goodbye to some of our colleagues” and blamed a “seismic shift” in both the public and private markets for the firm’s woes.
Though the San Jose, Calif.-based Lacework confirmed the payroll moves will impact about 20 percent of its workforce, the exact number of employees who were laid off is not clear. In a press release in February, the company said it had more than 1,000 employees, which would put the layoff number in the vicinity of 200.
Executives at Lacework, a cloud security company, could not be reached for comment.
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A company source shot down a Twitter report that 300 employees had lost their jobs, saying that figure was a “significant overestimate.”
Last November, Lacework announced it had raised a whopping $1.3 billion in Series D funding, which it touted in a press release was the “largest funding round in security industry history.” The funding round valued Lacework at $8.3 billion.
“We’ve had some pretty extraordinary sales performance, and it’s clear the market is big and growing quickly. It’s a great vote of confidence for us to be able to raise this much this soon,’ Lacework Chief Financial Officer Mike Staiger told CRN last November.
In November, Lacework, which was founded in 2015, had about 700 employees, after having tripled its headcount over the previous nine to 10 months, as CRN reported at the time.
The $1.3 billion in funding followed a $525 million growth round of funding in January 2021 that valued Lacework at $1 billion.
In their joint blog post on Wednesday, Hatfield and Parikh said the move to cut its workforce was a “very difficult decision” for company leaders.
“Over the past several weeks and months, a seismic shift has occurred in both the public and private markets,” they wrote. “While we do not have control of the environment around us, we do have a responsibility to control how we operate our business and make changes as needed to best position the company for continued and long-term success.”
Apparently responding to biting online criticism that company leaders weren’t keeping employees informed about what was happening at the company on Wednesday, Hatfield and Parikh wrote that they had “delayed this broader notification in order to speak with those impacted Lacers one to one throughout the day.”
The co-CEOs said they “have taken every effort to provide those impacted with severance encompassing compensation, healthcare coverage, and access to outplacement support.”
They added: “Our team is filled with extraordinary individuals and saying goodbye to this group is immensely difficult.”
As for the company moving forward, Hatfield and Parikh wrote: “We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet so we can be more opportunistic around investment opportunities and weather uncertainty in the macro environment. We remain 100 percent committed to continued best-in-class growth and leading the industry with our innovation.”
As late as February of this year, Lacework was confidently talking of impressive revenue growth, particularly via the channel, with president President Andy Byron telling CRN that the firm wanted to boost channel sales from 50 percent of its business to 100 percent.