The Cybersecurity sector is doing well. As cyberattacks continue to plague both public and private sector businesses, investor enthusiasm for all things cyber-related remains strong.
The sector is far from immune from the mass layoffs that are impacting every corner of the technology industry due to the number of high-profile cyberattacks. More tech workers lost their jobs in June than in the same month last year.
Despite raising huge amounts of cash, these layoffs are happening, with VC investments increasing year over year.
Less than a year after it filed to go public, IronNet announced plans to let go of 55 workers. The stock price of IronNet has fallen. The workforce reduction is part of a broader plan to streamline our operations for higher efficiency, to reduce overall expenses and preserve cash, and to set IronNet up for rationalized growth going forward, according to IronNet's spokesman.
The layoffs at IronNet are the latest in a long line of layoffs that saw the number of unfilled roles increase last year. As they struggle to demonstrate a path to profitability, they seem to be part of a wave of reductions impacting late-stage startups.
OneTrust, an Atlanta-based startup that helps companies manage privacy, security, and governance requirements, cut 25% of its workforce in June. The company raised $300 million in a Series C.
In an email to employees, the CEO of the company said that the business was on track for a record quarter and increased customer demand. Capital markets sentiment shifted to a more balanced approach between growth and profitability and we decided to reorganize to position OneTrust for continued long-term success.
Cybereason laid off 10% of its workforce in June. Less than a year after raising an additional $275 million in Series F funding, it filed for an IPO.
Cybereason said that the decision was difficult. As the bullish tech market conditions have turned and the tech IPO market has essentially closed, companies like us need to prioritize profitability over topline growth.
Deep Instinct, a New York-based security startup, lay off 10% of its workforce in June, while Automox, a security startup, laid off 75 people.
About 20% of Lacework's workforce was laid off in the previous month. The company's Series D round of funding valued the company at $8.3 billion. According to Lacework, it has over 1000 employees.
The co-CEOs of Lacework blamed a "seismic shift" in both the public and private markets in their announcement of the layoffs.
The impact of the current economic storm on VC investments is not yet known.
According to data from a financial advisory firm for the security industry, funding for cybersecurity startups hit nearly $6 billion in the first quarter of 2022, up almost 50% from the first quarter of 2021, but data from a research firm shows that this $6 billion in funding is a steep decline from the previous year
There were no IPOs in the first quarter, and the value of M&A transactions in the sector fell due to the Mandiant acquisition.
It looks unlikely that the cybersecurity sector will break the records it set last year.
2021 was a record-breaking year for cybersecurity startups