Dragos is cutting 9% of its workforce and making other moves to trim costs, as the industrial cybersecurity specialist works to maintain operations in an uncertain economic environment, CEO Robert M. Lee told employees in an email Tuesday, which was later shared in a blog post.
Lee took full responsibility for the downsizing after the company made considerable efforts to avoid layoffs, which affected 50 employees.
“It may come as a surprise that we are conducting layoffs when we’ve consistently maintained high levels of funding at fair and supportable valuations even in down markets,” Lee wrote. “But our focus is not simply about money and stability. It is also about independence so that we maintain the ability to be true to our mission.”
Lee said “unforeseen circumstances have changed the core metrics and fundamentals,” of the business at Dragos. If left unchecked, the company would not be able to maintain independence through an IPO or Series E funding round in the coming years, Lee wrote.
Over the past year the cybersecurity industry has seen a wave of mergers and acquisitions, including the Google acquisition of Mandiant. Publicly traded rivals have also reported longer sales cycles and other economic pressures.
When the economy began to soften, Dragos took measures to avoid layoffs, including hiring only for core investments and reducing discretionary spending.
Dragos missed sales targets during the first quarter as sales cycles lengthened and companies reduced the initial deployment size of the company’s technology.
The layoffs come about a month after Dragos was attacked by a ransomware threat group that attempted to extort the company after it gained access to some of the company’s systems by compromising the personal email of a new employee.
The company is tightening budgets in several areas, including travel, training, marketing and tool and data consolidation.
Laid off employees are getting two months severance and two months of COBRA health care coverage after June, which is already covered, the company said. The firm is also providing job seeking assistance from the recruiting team and optional career coaching from a company VP.