Job cuts hit cybersecurity firms despite surging growth from attacks
The display is being assembled by a construction crew at Moscone Centre in San Francisco, Calif.
San Francisco Chronicle via Getty Images| San Francisco Chronicle via Getty Images
Cybereason has not seen its growth expectations drop. Cybereason’s revenue expectations have risen due to the continued rise of ransomware attacks.
Cybereason has confirmed last week that they are cutting their costs. laying off 10%approximately 100 people, representing a third of the company’s workforce. This follows the economic swing this year, and the beating it took. software stocksThey have entered the public markets.
Cybereason’s story is resonating with many of those 450 plus vendors who attended RSA. RSA has become the most important conference for security software companies. Because of the potential harm caused by cyberattacks, no matter how well corporate IT or finance responds to inflation, budgets continue to grow when it comes protecting data and networks.
According to, global cybersecurity market growth is forecast to be 9.5% annually, to reach nearly $375 billion per year by 2028. Vantage Market Research. According to, this is almost twice the expected rate of growth for IT spending in the future, at most, over the next 2 years. Gartner.
Cybereason was unable to secure financing for the next round of its financing after closing its IPO window. However, private capital is an option. It would likely come at a high price and with very painful terms. $3 billion valuationIt was funded in the last funding round. CEO Lior Div opted for cash preservation and a reduction in expenses.
Cybereason, Lior Div
Kiyoshi Otta | Bloomberg | Getty Images
“We believed capital was available to us, in the amount we required and at the same cost,” Div stated in an interview in San Francisco this week at the annual RSA ConferenceThe company’s last-year operating plans were referred to as “[email protected]”. We were not optimal as a company.
Demand is not a problem.
Security company April report SophosThe survey revealed that 66% were hit in ransomware attacks by 2021. That’s up from 37%. According to the report, ransom payments increased by almost fivefold, reaching over $800,000.
Ransomware is an attack in which hackers infiltrate a company network, then hold the data hostage and demand money in exchange for the access to the data.
This year’s crisis is getting worse, as cyberattacks by Russia have been on the rise since February’s invasion of Ukraine. An announcement was made by U.S. cybersecurity officials and the four ally nations. advisoryIn April, the United States warned of an increase in cyber activity as a result of the “unprecedented economic costs” imposed upon Russia and the materiel support offered by its allies and partners.
Cybereason’s technology detects when malicious attacks occur and provides a continuous, real-time overview of the network. Thanks to the use of thousands upon thousands sensors around the globe, Cybereason is able to identify any suspicious or unidentified activity within a network and alert clients.
Cybereason was able to raise $325 million last year thanks to a high demand for software companies with high growth potential. While Div claimed he set his goal to raise only $200 million, the funds were so readily available that it was possible for Cybereason to grow.
The Nasdaq reached its peak four months later. This tech-heavy index fell 27% over the past four months. Cybereason’s nearest public-market rivals SentinelOne CrowdStrikeOver that time, they have fallen 66% and 35% respectively. SentinelOne’s revenue growth was 109%, while CrowdStrike saw a 61% increase.
Investors across the board have moved away from tech that is high-growth and are now looking for safer investments in names and industries that can withstand rising inflation and higher interest rates. Cybereason’s IPO market collapsed just like the IPO market. confidentially filing paperworkGet in touch with us to learn more about our upcoming offerings.
“We agreed to leave, but now it’s up to us to be fiscally responsible so that we can continue the business for many more years,” Div stated.
Despite the fact that neither CrowdStrike nor SentinelOne have changed their hiring plans in any way, the slide of CrowdStrike and the wider market has forced preIPO companies as well as those already at the beginning stages to reassess the prospects of their prospects based upon the realities of capital markets.
Deep Instinct, an innovative start-up using deep learning to stop ransomware. cutThis week, 10% of the company’s salespeople were absent. This is despite a growth rate exceeding 200% in annual revenue last year, which was reflected in the expansion of sales staff into this first quarter.
Deep Instinct chairman Lane Bess stated that Deep Instinct needed to improve its sales process.
“We looked at each other and asked, “Where is the best place to be effective within our company?” In an interview with RSA, Bess stated this. “Where we have inside salespeople, are we doing well on the low-end of the market?” No. No. Yes.'”
Cloud security vendor Lacework stated that it had been incorporated in May. cutting 20%Just six months after raising $1.3Billion at an $8.3B valuation, it was already a majority of its workforce. According to the company, a seismic shift in markets led it to implement modifications.
Lacework stated that while we cannot control the world around us, it is our responsibility to manage how we run our company and to make adjustments as necessary to ensure the company’s continued success. blog post.
Hiring freezes and layoffs in companies which were once in hyper-growth mode will likely have an indirect effect on the overall labor market. Every CEO and recruiter will agree that the competition for technical talent is as difficult as ever. However, market turmoil forces employers to rethink how they approach compensation.
Todd McKinnon CEO, of OktaA company which provides corporate identity management software, is. We want our salary to match the highest market average, but we don’t need more. We don’t want our market to fall, so we won’t be too slow to adapt.
Okta, like its public-traded counterparts, has suffered a severe year with its stock dropping 58%. There are plenty of business opportunities. In the first quarter, revenue jumped by 65%.
McKinnon doesn’t expect a rush of talent, as “private companies still possess a lot of money.” According to The Washington Post, venture capitalists invested a record $332.8 million in U.S. startups last year. This is twice the amount they did a year ago. National Venture Capital Association.
CNBC spoke with high-value private security firms like Snyk (8.5 billion), Tanium (9 billion) or Illumio (2.75 billion). They said they don’t plan to lay off anyone and that their business is booming.
SnykPeter McKay, CEO of the company, acknowledged that “the price of money has increased massively compared to what you were able to raise previously in multiples going forward”, but said his company was fine having raised $530 million last fiscal year.
McKay said, “We don’t need to raise.” His company’s technology allows customers to quickly identify vulnerabilities in code. McKay said, “We have a path towards profitability. And we’ve accelerated the pace of our way to profitability.”
Charles Ross is the Chief Customer Officer at TaniumHis team will be watching clients’ progress, said he, adding that there is no indication of slowing down. This company recently closed its most successful quarter, both in terms revenue and customer base, having increased headcount by over 1,000 last year, which is more than 80%.
Ross shared one thing he hears from his customers: they are consolidating their security portfolio to a select few vendors, and cutting other areas. Tanium technology provides IT managers with visibility to their entire network, allowing them to identify threats and determine where they are lacking protection. Ross explained that it is typically used alongside endpoint security software like SentinelOne and CrowdStrike.
Ross told RSA that “they’re running us better together” in an interview.
Und at IllumioAndrew Rubin, chief executive officer of, said last month that “the topic” of downsizing and letting go people was not addressed at the board’s most recent meeting.
Rubin said, “We have no discussion happening within the company about laying anyone off.”aised $225 million last year. “Years, years and more of runway” are the words of his company.