Amid the coronavirus pandemic and economic fallout, some cybersecurity companies are disclosing targeted layoffs and/or temporary pay cuts for remaining employees.
Among the recent developments to note:
- OpenText, parent of Carbonite and Webroot, is cutting 5 percent of its staff and reducing compensation in many areas through June 2021, CEO Mark Barrenechea disclosed on the company’s May 1 earnings call.
- FireEye is laying off about 6 percent of its staff, CEO Kevin Mandia disclosed on the company's April 28 earnings call.
- Herjavec Group, a Top 200 MSSP every year since this Website’s launch, cut 8 percent of its 350-person workforce, founder and Shark Tank investor Robert Herjavec told CNBC on April 2.
- Zix, a provider of cloud-based email security that works closely with MSPs, continues to grow but had layoffs in April, CEO David Wagner confirmed on a May 6 earnings call.
OpenText, FireEye and Zix are publicly held and were growing as of early 2020. In OpenText's case, the Carbonite data protection and Webroot cybersecurity businesses met financial targets in the company's most recent quarter. But the parent company wants to maintain a strong financial position amid ongoing economic uncertainty. Hence, the targeted staff cuts and temporary companywide compensation cuts.
At FireEye, the company's shift toward managed security services continues to accelerate. The targeted cuts apparently involved legacy-oriented security appliances.
And at Zix, the company continues to expand its MSP base while leveraging the AppRiver acquisition of 2019. But the April cost cuts were designed to help the company maintain a strong financial position amid the economic headwinds.
Bracing for Impact
Even well-known, cloud-based cybersecurity software companies are bracing for impact. An example: BlackBerry, parent of Cylance, has modeled scenarios where revenue drops 20 percent, 30 percent and even 50 percent, CEO John Chen told Wall Street analysts during an earnings in late March 2020.
While Chen doesn’t expect those worst-case revenue scenarios to occur, BlackBerry modeled them to prove the company could survive worst-case industry scenarios, he told analysts at the time.
Meanwhile, technology startups have been particularly hard-hit by layoffs. Over 35,000 startup employees have been laid off amid the COVID-19 pandemic, Layoffs.fyi reports as of May 5, 2020.
Article originally published May 5, 2020. Updated May 7, 2020 with Zix-related information.