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KEY POINTS
- The cuts will reportedly affect around 470 Rapid7 employees
- Reports about Rapid7 considering a takeover first emerged in February
- Alphabet, Thoma Bravo and TPG Capital were among the reported interested companies
Cybersecurity company Rapid7 has announced an 18% reduction in its workforce as part of a restructuring, reportedly affecting more than 400 employees.
The company was reportedly considering a takeover earlier this year.
The Boston-based cybersecurity solutions provider’s board of directors approved a restructuring “that is designed to improve operational efficiencies, reduce operating costs and better align the Company’s workforce with current business needs,” as per a Securities and Exchange Commission filing.
The restructuring will result in an 18% cut in its employee headcount. The company is expecting to incur charges of between $24 million and $32 million in relation to severance payments, employee transition and other costs related to the plan.
The job cuts would affect around 470 employees, The Boston Globe reported. Rapid7 did not immediately respond when contacted by International Business Times for comment.
Rapid7 also looks to permanently shut down “certain office locations” but did not specify which branches will be affected. It expects an impairment loss of around $4 million in the process.
In a message to employees Tuesday, Rapid7 CEO Corey Thomas said the company reached the restructuring decision as rapid growth “created unnecessary friction and inefficiencies which hinder our customer experience.” He added that the restructuring would “set up our teams and customers for long term success.”
Departing employees will be eligible to receive severance packages that include health care coverage for the severance period and career support. For employees outside the U.S., Rapid7 will “take great care” in assisting affected workers. Staffers whose employment is connected to their immigration status will get assistance from the People Strategy team.
The layoffs came months after Reuters first reported in February that Rapid7 was considering options that included a possible sale, citing people familiar with the matter.
The outlet said in January that the cybersecurity software company was cooperating with Goldman Sachs after it attracted acquisition interest from parties that included private equity firms.
Sources who requested anonymity due to the confidentiality of the matter clarified that discussions for a potential takeover were at an early stage at the time, so a deal was still uncertain.
Takeover reports resurfaced in May, resulting in a 6.3% spike in the company’s stock. Rapid7 was reportedly involved in a potential sales process with Google parent Alphabet at the time. A month earlier, Thoma Bravo and TPG Capital were reported to be interested in taking over the company.
Rapid7 did not immediately respond to IBT’s request for comment on takeover reports.
Some employees affected by the Rapid7 layoffs, including a senior technical talent acquisition partner and a project manager, posted about the cuts on LinkedIn Tuesday as they searched for job leads.
Rapid7 is just one among a growing number of cybersecurity firms that have implemented workforce reductions this year, with HackerOne cutting 12% of its staff earlier this month and Kape Technologies also slashing around 12% of its workforce late in July.
At least 40 cybersecurity firms have had layoffs this year, as per layoffs tracker layoffs.fyi. In the wider tech space, more than 225,360 workers have lost their jobs in various tech sub-sectors.
