OneTrust layoffs will impact 25% of the security company's staff -- the latest sign that venture-backed technology companies are not immune to falling valuations and rising interest rates.
The OneTrust layoffs involve 950 employees, CEO Kabir Barday disclosed in a blog. In that blog, Barday said:
"I know this news is surprising, especially as you heard last month that the business is on track with record quarters and increasing customer demand. However, capital markets sentiment shifted to a more balanced approach between growth and profitability, and at this time, we have decided the best course of action is to reorganize to position OneTrust for continued long-term success."
OneTrust, a privacy, security and data governance solutions provider, is backed by multiple venture capital firms and investors -- including SoftBank and Franklin Templeton. The company raised $510 million in Series C funding through April 2021.
Valuation Resets: Prioritizing Profits Over Revenue Growth
The OneTrust layoffs come a few days after multiple MSP software industry companies told ChannelE2E that they were concerned about downward valuation pressures — and the potential impact on employees who have been working long hours to chase the “exit” dream (either through IPOs or M&A deals).
For those who haven’t been watching Wall Street, fast-growing (but money-losing) SaaS companies have seen their valuations cut dramatically in recent months. ChannelE2E warned that the shift may begin to impact MSP service provider valuations. Among the areas of potential concern: As interest rates rise, it will cost private equity firms more to borrow money to fund MSP acquisitions.
Fast forward to present day, and venture-backed software companies are beginning to witness the valuation pressures. Indeed, multiple venture-backed technology companies have announced layoffs in recent weeks -- essentially stating that Wall Street and investors now favor a "path to profitability" over growth-at-all-costs strategies. Those making the path-to-profits pivot include Cybereason, Lacework and Liongard, among others.
OneTrust Partner Program: Where MSPs & MSSPs Fit In
Amid the layoffs, it's important keep in mind that OneTrust's partner ecosystem continues to grow. The program extends across resellers and distributors; VARs; and MSPs.
Moreover, OneTrust is a member of MISA -- the Microsoft Intelligent Security Association. MISA is an ecosystem of independent software vendors and MSSPs that have integrated their solutions with Microsoft's software.