OneTrust has confirmed it’s laid off 950 employees, or about 25 percent of its workforce, as part of a reorganization despite record quarters and increasing customer demand. Some analysts predict rough times ahead for startups in the security space.
One in four OneTrust workers learned last week that their jobs were eliminated in a cost-cutting move. The Atlanta-based privacy and security startup, which has raised more than $925 million in venture capital, laid off 950 employees worldwide.
OneTrust CEO and founder Kabir Barday, in a LinkedIn post June 9, described the move as “one of the most difficult decisions I’ve had to make as a leader,” and included a link to an email sent to all OneTrust employees earlier in the day.
“I know this news is surprising, especially as you heard last month that the business is on track with record quarters and increasing customer demand,” Barday said in the email. “However, capital markets sentiment shifted to a more balanced approach between growth and profitability, and at this time, we have decided the best course of action is to reorganize to position OneTrust for continued long-term success.”
Barday’s LinkedIn post attracted hundreds of comments, many registering sharp criticism of company leadership.
As one poster wrote, “For such a young and innovative company, could you not have built in ‘Sustainability by Design’ instead of propping up the success of your company on the hopes of a young and dedicated, apparently expendable, workforce?”
But the majority of comments on Barday’s post supplied job leads to the newly laid off tech workers, with links to companies that are currently hiring. Other well-meaning posters offered support and encouragement to job seekers.
OneTrust is one of a few security firms that have recently announced layoffs, despite a surge in ransomware attacks worldwide and projections that the global cybersecurity market will grow at an annual rate of 9.5 percent a year, reaching almost $375 billion a year by 2028, according to Vantage Market Research.
In late May, cloud security software vendor Lacework said it was cutting 20% of its workforce, just six months after raising $1.3 billion at an $8.3 billion valuation. As reported by CNBC, the company said a “seismic shift” in the markets forced it to make modifications. Likewise, a week after Lacework announced its layoffs, endpoint-security firm Cybereason laid off about 10 percent of its workforce.
Industry analysts now predict rough times ahead for companies in the security startup space, and in tech startups in general, suggesting that valuations probably reached their peak about six months ago.