Latest Layoffs Come Less Than 4 Months After Company Cut Staff by 5%
Snyk has executed another round of layoffs, axing 14% of its workforce and removing cloud security leader Aner Mazur and top legal officer Karyn Smith from their posts.
The Boston-based application security vendor revealed Monday plans to reduce its more than 1,400-person staff by 14% – or 198 employees – less than four months after laying off 30 people, or 5% of its workforce. Mazur will leave just three months after moving into a new role as senior vice president of market strategy, while Smith will depart after only 10 months with the organization as chief legal officer.
“Today is one of the most difficult in Snyk’s history,” CEO Peter McKay wrote Monday in a message to employees that was also posted to the company’s blog. “We now must operate even more efficiently in order for Snyk to effectively withstand the continued headwinds facing the global economy. … today’s adjustments are required to best position us for future growth.”
Mazur, who spent nearly four years as Snyk’s chief product officer, reported directly to McKay and led the company’s cloud security team to help Snyk navigate the complex and evolving market landscape. Commvault cloud chief Manoj Nair replaced Mazur as Snyk’s product leader and has been directed to focus on platform depth and capabilities.
Smith’s departure means Snyk’s legal team will now report to chief financial officer Kenneth MacAskill. Smith joined Snyk in January after more than seven years at Twilio, where she grew the company’s legal team from one person to more than 140 attorneys and legal professionals. Smith will depart Snyk this week, while Mazur is staying through the end of 2022 to support the transition.
Snyk says it will provide laid-off employees with outplacement services, an employee assistance program and a private LinkedIn support group. Following the layoffs, McKay says, Snyk plans to prioritize scaling and more effectively serving enterprise customers while looking for ways to drive more efficient engagement with the small and midsized business market (see: Synopsys, Checkmarx Top Gartner MQ for App Security Testing).
Sign of the Times
Snyk has experienced a dramatic reversal of fortune since September 2021 when it became the second-most-valuable venture-backed cybersecurity company in the world after completing a $530 million Series F funding round at an $8.5 billion valuation. McKay told CRN at the time that the money should position Snyk to go public in late 2022 or early 2023 and allow the company to bring in top-tier public investors.
At the time of its Series F funding, Snyk had increased its annual recurring revenue by 150% to roughly $100 million, The Information reported.
Just 13 months later, McKay has directed Snyk to reduce its spending on everything from brick-and-mortar offices to IT and subscription services to business travel. The company is based in Boston and has large offices in London, Singapore and Tel Aviv as well as smaller outposts in Australia, Canada, Japan, Romania, Sweden – in two locations, Switzerland and the United States, according to Snyk’s website.
Snyk in June responded to the economic downturn by accelerating its plans to become free cash flow positive by a full year to 2024, and McKay reiterated that commitment Monday. Despite the cuts, McKay says Snyk’s business continues to grow aggressively and that the company has more than doubled in size each year and currently serves over 2,300 customers.
Despite raising $850 million over the past eight years, Snyk still faces a competitive market environment. Gartner in April named Snyk as a challenger in application security testing due to its completeness of vision lagging mainstays such as Synopsys, Checkmarx and Veracode. Gartner said Snyk’s offering lacked built-in functionality and didn’t provide the setup and functionality that security professionals need.
A Summer of Layoffs
Snyk is at least the 14th security vendor to lay off employees in recent months. Security layoffs have been primarily concentrated at late-stage startups expected to file for an initial public offering in the next few years, and Aura, Cybereason, Deep Instinct, Lacework, Malwarebytes, OneTrust and Transmit Security join Snyk in experiencing job cuts since late May.
Recent entrants to the public markets haven’t fared much better. Appgate in late July laid off 130 employees, or roughly 22% of its workforce, just nine months after going public through a merger with a publicly traded shell company. And in late August, publicly traded network management firm Tufin laid off 55 employees, or 10% of its staff, days before being acquired by Turn/River Capital for $570 million.
Early-stage startups haven’t escaped the pressure to demonstrate a path to profitability either. Arete IR, Automox and strongDM have all disclosed staff reductions since June. But aside from Snyk, IronNet is the only cybersecurity vendor this year to publicly disclose multiple rounds of layoffs. The Washington, D.C.-area cybersecurity firm reduced its workforce by 17% in June and cut an additional 35% in September.