Tucked into cloud risk and threat detection company Rapid7's second-quarter earnings report was a paragraph announcing a "restructuring plan." Or, in layman's terms, layoffs. You'd be forgiven if you blinked and missed it.
Corey Thomas, chairman and CEO of Rapid7, announced the layoffs in an email to employees and a blog post published Tuesday, August 9, 2023. Rapid7 would cut approximately 18% of its workforce, or about 470 of its approximately 2,700 employees worldwide.
Rapid7's Strong Second Quarter
“Rapid7 delivered strong second quarter results, ending the quarter with ARR of $751 million. Revenue and Non-GAAP operating income exceeded our guidance ranges and we saw better than expected traction with our consolidation offerings as customers gravitate towards our integrated security operations platform,” said Thomas in a statement about the company's earnings.
Despite these strong results, the company went on to say, "In order to build upon the momentum we’re seeing in security operations, today we announced a restructuring plan to position us to accelerate investments in becoming the leading provider of integrated security solutions for the modern SOC. In addition to enabling a higher quality customer experience, we expect the net results of these optimizations will support growth in the business while allowing us to double free cash flow in 2024.”
Thomas went on to say that while the layoffs were a “difficult decision” and “may be surprising” to employees “when we are meeting performance expectations ... making decisions from a place of strength allows us the opportunity to restructure intentionally.”
Thomas said Rapid7 would shift focus to its security operations center (SOC) and managed services specialties "to move decisively and strategically toward an integrated experience" and away from an emphasis on point solutions. Earlier this year, the publicly traded company reportedly considered a sale to private equity investors. In March, Rapid7 acquired Minerva Labs for $38 million in cash and stock.
Tech Industry Layoffs
Of course, Rapid7 is not alone when it comes to staff cuts. AppSec firm Snyk laid off 128 people in April. Cloud security vendor Zscaler announced layoffs after what it called a rough fiscal second quarter. Software tools giant Atlassian laid off 5% of its workforce as it “shifted priorities.” Accenture axed 19,000 jobs last month, and Veeam laid off 3.8% of its workforce. Oxford, U.K.-based platform security vendor Sophos in January laid off 10% of its staff, or 450 workers. In February, San Francisco-based identity security giant Okta axed 5% of its workers – or roughly 300 employees – while Atlanta-based cybersecurity services vendor Secureworks cut 9% of its staff, or approximately 210 positions, according to BankInfoSecurity.