A well-funded startup in the cybersecurity industry, Lacework, has become the latest tech firm to disclose a major round of layoffs amid fears of a broader economic slowdown.
In a statement provided to Protocol, Lacework confirmed that the layoffs impacted 20% of its employees, in connection with what it called a "decision to restructure our business."
The company did not disclose how many employees in total have been laid off. Lacework had previously disclosed having more than 1,000 employees as of March 2022.
A Lacework representative said that a figure for the total number of employees affected by the layoffs shared on Twitter on Wednesday was a "significant overestimate."
In a blog post Wednesday, the cloud security vendor said that "today, we made the very difficult decision to say goodbye to some of our colleagues, as part of a restructuring and modification to the company plan."
The company has "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," the company said in its blog post, signed by co-CEOs David Hatfield and Jay Parikh.
Lacework has raised $1.85 billion in funding since its launch in 2014, most of which was announced in 2021. The company disclosed raising $525 million in January 2021, followed by a $1.3 billion funding in November 2021 that brought with it an eye-popping valuation of $8.3 billion. Lacework touted the fundraise as "the largest funding round in security industry history," and the firm ranks at No. 3 in terms of the biggest valuations for privately held security companies, according to CB Insights.
The company has said that its customer base grew by 3.5X in 2021. Between the massive funding and rapid expansion of its business, Lacework went on a hiring spree last year — going from 200 employees in January 2021 to more than 1,000 as of March.
However, "over the past several weeks and months, a seismic shift has occurred in both the public and private markets," the co-CEOs said in the post. "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."
Lacework offers a "data-driven" service that aims to stand out in the fast-growing cloud security market by collecting and analyzing data from across a customer's cloud environments. The goal is to to provide customers with crucial security insights, such as which threats should be prioritized for action, the company has said.
The Lacework platform supports AWS, Google Cloud, Microsoft Azure and Kubernetes (Amazon EKS) environments. Previously disclosed customers include VMware, Snowflake and Pure Storage.
Lacework is also notable for having been just the third company to be incubated out of Sutter Hill Ventures, following a model that was used to launch Pure Storage and Snowflake. The company is led by Hatfield, who was formerly the president of Pure Storage, and Parikh, previously Facebook's vice president of engineering.
"Despite the broader economic environment – demand for cloud security will remain strong, and it is critical to all online, cloud businesses," the co-CEOs said the post Wednesday.