Israeli-US cybersecurity company Snyk is embarking on a second round of job cuts. Snyk CEO Peter McKay told employees today that 14% of the workforce is being cut - 198 employees in Israel and the US. It was only just over a year ago that Snyk raised $300 million, at a company valuation of $8.5 billion. But in June, Snyk laid off 30 employees, becoming one of the first tech companies to make cuts at the sector began to slow down.
The company had been growing rapidly over the past year and expanding its workforce, which has stood at about 1,400 over the past three months. The number of Snyk's employees has grown by 220% over the past two years but according to LinkedIn has grown by only 6% over the past six months.
The company is headquartered in Boston and led by CEO Peter McKay with Israeli founders Guy Podjarny (president), and Assaf Hefetz stepping aside while cofounder Danny Grander left the company in May and has become a serial investor. Founded in 2015, Snyk has developed a platform that identifies security breaches and open source licensing management issues for code and takes effective action.
Website "The Information" has revealed in the past that at the time of the company's most recent financing round in September 2021, annual recurring revenue was $100 million, up 40% from 2020. But with the slowdown in the tech sector would have had to raise hundreds of millions of dollars more, which would have seen its valuation fall. While Snyk received a multiple of 85 on its revenue in the last financing round, in any current financing round it would have to make do with a multiple of 12-15 on revenue.
Among those who will be leaving the company is SVP Aner Mazur, who held senior roles in product and sales.
Reorganization
McKay said in a post, "Over the course of 2022 while our business has continued to grow, we’ve also witnessed a number of significant market shifts, and, as a result, we are restructuring and reducing our global workforce, impacting 198 employees, representing 14% of our total workforce as of today.
"In June, I shared that we needed to adapt to an evolved mindset balancing continued top line growth with profitability and committed to becoming free cash flow positive in 2024. Our business continues to grow aggressively, more than doubling in size each year with currently over 2,300 customers, but we now must operate even more efficiently in order for Snyk to effectively withstand the continued headwinds facing the global economy."
Published by Globes, Israel business news - en.globes.co.il - on October 24, 2022.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.