Splunk, a San Francisco-based cybersecurity and observability vendor, has initiated a second round of layoffs, affecting 7% of its workforce, following Cisco’s announcement of a $28 billion acquisition.
Approximately 560 positions are set to be cut, with a focus on the United States, where the majority of Splunk’s employees are based. This decision comes nine months after Splunk’s first round of layoffs, which affected approximately 325 staff, primarily in North America. The layoffs are attributed to the challenging macroeconomic environment, and Splunk anticipates investing $37 million in severance payments and $5 million in share-based compensation expenses to complete the reorganization by April 30, 2024.
CEO Gary Steele emphasized that these layoffs are unrelated to Cisco’s acquisition but are part of a broader effort to realign resources and operating structure in response to market uncertainties. Employees affected or potentially affected by the layoffs in the U.S. and the Americas will receive notifications, while those in other countries might experience longer notification timelines due to local employment practices.
Splunk plans to provide severance packages, healthcare coverage, and job placement resources for the laid-off workers. The company’s CEO, Gary Steele, is set to join Cisco’s executive leadership team following the acquisition’s completion, highlighting the significance of cybersecurity in Splunk’s business.
Splunk, known for its security information and event management platform, has evolved its services beyond traditional SIEM to include security orchestration, automation and response, user behavior analytics, security monitoring, incident management, threat hunting, insider threat detection, and compliance.
Despite the layoffs, Splunk reported an increase in sales in the six months ending July 31, with $1.66 billion in revenue, a 12.8% growth compared to the previous year. Additionally, the company’s net loss during the same period showed improvement, with a 49.5% decrease to $259.7 million. The layoffs at Splunk come amidst a wave of layoffs among cybersecurity vendors in response to worsening economic conditions since May 2022, affecting nearly 100 companies, including Silicon Valley-based Exabeam and F-Secure.