Cloud security startup Lacework Inc. has laid off 20% of its workforce, Protocol reported on Wednesday.
Lacework told the publication in a statement that the move is related to a “decision to restructure our business”. The startup didn’t specify exactly how many workers are leaving. It was earlier reported that Lacework had more than 1,000 workers in March, up from 200 at the start of 2021.
San Jose, California-based Lacework provides a platform that helps organizations protect their cloud environments from hacking attempts. The startup’s platform provides a broad array of cybersecurity features. It can detect malicious activity, software vulnerabilities and misconfigured cloud settings, as well as organize issues based on severity to help companies prioritize their remediation efforts.
Lacework has raised about $1.9 billion from investors since launching in 2015, most of it through a $1.3 billion round announced last November. The round valued the startup at $8.3 billion. Also in November, Lacework disclosed that its revenue tripled during 2021 while the number of companies using its platform increased by 350%.
On Wednesday, Lacework co-Chief Executive Officers David Hatfield and Jay Parikh sent an email to employees addressing the layoffs that the startup announced this week. The email was later posted on the startup’s blog.
“Over the past several weeks and months, a seismic shift has occurred in both the public and private markets,” Hatfield and Parikh wrote. “While we do not have control of the environment around us, we do have a responsibility to control how we operate our business and make changes as needed to best position the company for continued and long-term success.”
Hatfield joined Lacework last February after earlier serving as the president of Pure Storage Inc., a publicly traded data center storage supplier. Parikh, who was previously the head of engineering and infrastructure at Meta Platforms Inc., joined Lacework last July.
“Our team is filled with extraordinary individuals and saying goodbye to this group is immensely difficult,” the executives wrote in the Wednesday blog post. “We have taken every effort to provide those impacted with severance encompassing compensation, healthcare coverage, and access to outplacement support. As they pursue opportunities outside of the company we will help in whatever way we can.”
Hatfield and Parikh also provided an update about the startup’s roadmap.
“We have adjusted our plan to increase our cash runway through to profitability and significantly strengthened our balance sheet so we can be more opportunistic around investment opportunities and weather uncertainty in the macro environment,” the executives detailed. At the same time, Lacework will “continue to invest in building out our technology teams, who remain focused on innovating quickly,” Hatfield and Parikh wrote.
The executives added that “despite the broader economic environment – demand for cloud security will remain strong, and it is critical to all online, cloud businesses.”
Lacework is the latest in a series of startups to have announced layoffs over the past few weeks. In conjunction, some of the tech industry’s largest players are slowing down their hiring efforts. Microsoft Corp. stated today that it plans to continue growing its headcount this year ”but will add additional focus to where those resources go,” while Meta earlier froze hiring across several business units.