Cybereason Confirms Layoffs Due to Closed Tech IPO MarketCybereason Confirms Layoffs Due to Closed Tech IPO Market
Macroeconomic issues are impacting the overall tech market.
June 3, 2022
Cybereason this week announced layoffs impacting 10% of its workforce in Israel, the United States and Europe, citing a closed tech initial public offering (IPO) market.
According to CTech, Cybereason is laying off about 100 workers, with the company laying off dozens at its Israel headquarters, and the rest working at its offices in the United States and Europe.
Cybereason operates in 50 countries and its workforce totaled 1,500, CTech said.
Cybereason sent us the following statement regarding its layoffs:
“On June 1, we internally announced a reduction in workforce (by approximately 10%). This was an extremely difficult decision. 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 profitability over top-line growth.”
Cybereason’s Market Traction ‘Remains Strong’
Cybereason said its market traction remains strong. It has “long-term objectives in mind and plans for a tremendous outcome when the markets – and we – are ready.”
In February, Cybereason reportedly filed for an IPO at a valuation of $5 billion. Former U.S. Treasury Secretary Steven Mnuchin’s investment firm, Liberty Strategic Capital, is one of Cybereason’s investors.
Cybereason reportedly finalized underwriters for its IPO. It anticipated the IPO in the second half of the year.
The company wouldn’t address the status of its IPO plans.
According to CNBC, after a banner year for tech IPOs in 2021, the most notable companies to go public are now suffering some of the biggest losses on the market. CNBC said the IPO calendar for 2022 has been dormant. In addition, no big tech companies will likely file for IPOs in the second quarter.
Macroeconomic Issues Affecting Overall Tech Market
Eric Parizo is principal analyst of Omdia’s cybersecurity operations intelligence service. (Informa is the parent company of both Omdia and Channel Futures.) He said Cybereason‘s staff reduction is likely less about the company’s ability to execute and more about the macroeconomic issues affecting the tech market overall.
In a matter of weeks, an overall solid economy has quickly taken a downturn largely due to inflation,” he said.
Omdia’s Eric Parizo
“That is having a ripple effect throughout the global economy,” Parizo said. “And both tech and more specifically cybersecurity aren’t immune to those effects.”
Amid the current conditions, an IPO for Cybereason becomes much more challenging, he said. Moreover, the vendor was counting on a near-term IPO to deliver a long-awaited return for its investors.
“Now that the horizon for its market debut seems to be much longer, or perhaps even off the table in favor of an acquisition, it’s understandable that Cybereason needs to show its investors that it is doing everything it can to be fiscally responsible in the interim,” Parizo said. “Overall, I believe Cybereason is one of the most innovative threat detection, investigation and response (TDIR) vendors in the market today. The company is so far succeeding with its transition into extended detection and response (XDR), and boasts a number of industry-leading capabilities, including investigation automation, event sequence-visualization, and even predicting likely attacks based on known indicators.”
Despite this bump in the road, Cybereason has a bright future ahead, he said.
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