Another late-stage cybersecurity startup with an eye on going public is laying off employees and streamlining operations amid deteriorating market conditions.
Boston-based Snyk, which last fall raised $530 million in Series F funding and openly talked of going public this year or next, has cut about 30 employees from its workforce as part of its efforts to “navigate looming economic headwinds” and ensure long-term growth, CEO Peter McKay wrote in a blog post on the company’s website on Thursday.
“While these were difficult decisions, they were made with our shared visions in mind,” McKay said. “We appreciate these former Snykers and their contributions during an important period in our journey and support their future success.”
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McKay didn’t give specifics about the workforce reductions, only to say they were worldwide in nature and conducted “over the last quarter.”
It’s unclear what percentage of Snyk’s workforce was affected by the layoffs. Last fall, the application security vendor told CRN that it hoped to grow its staff from 750 to about 800 people by the end of 2021. Using that number, the 30 laid off workers represent about 3.75 percent of its payroll.
A representative for Snyk could not be reached for comment.
Snyk is just the latest cybersecurity company to tighten its belt amid tough economic conditions that have included Wall Street pounding tech stocks and drying up the IPO market in the process.
A week ago, cybersecurity technology developer IronNet, based in McLean, Va., said it was laying off 55 employees, or 17 percent of its total headcount. In mid-June, Atlanta-based One Trust it was laying off about 25 percent of its 950 employees.
Meanwhile, Boston-based Cybereason in early June said it has laid off 10 percent of its workforce only four months after it confidentially filed for an IPO and less than a year after it raised an additional $325 million in funding.
They all had one thing in common: they cited worsening economic conditions for their actions.
In the case of Snyk, it had been on a roll of late, raising $530 million last September and acquiring a number of companies, including this past winter’s purchase of cloud-security vendor Snyk for an undisclosed sum.
Last fall, McKay, whose company’s Series F funding round was based on a $8.5 billion valuation, was confident enough to say that Snyk was looking to go public in late 2022 or early 2023.
But the IPO plans for Snyk, founded in 2015, and other startups appear to have been dashed by the recent Wall Street pullback and freeze on public offerings.
The result: Many later-stage companies like Snyk have been pulling back on their spending in order to preserve cash over the long haul.
“My foremost responsibility is to ensure that our employees, customers and investors are best set up for long-term success, with the confidence that they’re investing their money, talents and time into a company built to last,” Snyk’s McKay said in his blog post this week.
Though the company has gone through an “extended period of hypergrowth,” McKay said there is no denying the economic storm clouds ahead.
“To ensure we’re in the best possible position to thrive under these new circumstances, we collectively must embrace an evolved mindset that balances profitability with continued top line growth,” he wrote.
McKay said recent reorganizational moves have “accelerated our plans by a full year to become free cash flow positive in 2024.”
He added: “This will place us in a stronger position to take advantage of current market challenges, exiting this volatile period stronger than ever.”