(CTN News) – Rapid7 (NASDAQ: RPD) is the latest cybersecurity vendor to announce layoffs, announcing a restructuring plan late Tuesday that will result in an 18% reduction in staff.
Based on the approximate 2,700-person headcount at the end of 2022, approximately 500 employees will be affected, with more than 700 in the Boston headquarters.
In an SEC filing, the company also stated that it would close certain office locations, but it did not specify how many or which offices would be closed.
In after-hours trading on Tuesday, the news of the layoffs was announced as the company reported strong Q2 2023 results.
The company ended the quarter with annualized recurring revenue (ARR) of $751 million, an increase of 14% year-over-year, and total revenue of $190 million, an increase of 14%. As a result, products revenue reached $182 million, an increase of 14% over last year.
Corey Thomas, Chairman and CEO of Rapid7, said in a statement, “We exceeded our guidance ranges with revenue and non-GAAP operating income and saw better than expected traction with our consolidation offerings as customers gravitated towards our integrated security operations platform”.
Today, we announced a restructuring plan designed to position us to accelerate investments in becoming the leading provider of integrated security solutions for the modern security operations center,” Thomas said.
Additionally, we expect the net results of these optimizations to support growth in the business and allow us to double free cash flow in 2024.”
As part of the restructuring, Rapid7 estimates that it will incur approximately $24-$32 million in charges in connection with improving operational efficiency, reducing operating costs, and better aligning its workforce with current business needs, top strategic priorities and growth opportunities.
Thomas wrote in an email to Rapid7 employees that “we engaged an external advisor prior to making restructuring decisions to identify the most impactful opportunities in our business.”
“They determined that we could reduce the size of our business and improve efficiency, while remaining a growth-oriented company with the capacity to make strategic investments in our customers.”
Rapid7 announced earlier this year that it would acquire Israeli anti-ransomware startup Minerva Labs for $38 million in order to enhance its managed detection and response offerings.
Additionally, in 2021, the company acquired threat intelligence firm Intsights for $335 million, and in 2020, it acquired cloud security firm DivvyCloud for $145 million.
Reuters reported in February 2023 that Rapid7 had been in discussions with Goldman Sachs about a potential sale.
Rapid7 is not the only company to announce layoffs as companies try to reduce costs in order to maintain profitability and preserve cash flow. OneTrust (950 employees, 25% of its workforce); Sophos (450, 10%); Lacework (300, 20%); Cybereason (200, 17%); OwnBackup (170, 17%); Dragos (50, 9%) and several other companies have announced layoffs.