Zscaler discloses layoffs for three per cent of employees
The cuts come after the cybersecurity vendor’s headcount surged over the past 18 months
Cybersecurity firm Zscaler has adopted a restructuring plan that will include layoffs affecting three per cent of its workforce, or about 177 employees, the company disclosed Thursday.
Over the past 18 months, Zscaler — known for its cloud-based security tools including in the zero trust security space — "doubled the size of [its] team to approximately 5,900 employees as [it] invested aggressively based on strong market momentum," Zscaler CFO Remo Canessa said Thursday during the company's quarterly call with analysts.
Amid the challenging economic environment, the vendor has undertaken a "targeted optimisation initiative to address inefficiencies in certain job functions and projects," leading to the three per cent workforce reduction, Canessa said.
The disclosure came as the company reported results for the second quarter of its fiscal 2023, ended 31 January. Zscaler's stock price fell 11.8 per cent in after-hours trading Thursday, to $118.32 per share.
"After significantly growing our teams in recent years, we took a fresh look at our organisation and found opportunities to streamline operations and to align people, roles and projects to our strategic priorities," Zscaler founder and CEO Jay Chaudhry said during the quarterly call.
"As a result of the review, we initiated our targeted cost optimisation plan to drive additional operational efficiency that best positions us to deliver profitable growth," Chaudhry said.
Mass tech layoffs
Zscaler is joining numerous other companies in the cybersecurity industry, as well as in the tech industry overall, in cutting back on staff amid a difficult economy.
Other publicly traded cybersecurity vendors to cut staff have included Okta, which laid off 300 employees with a five per cent workforce reduction in February, and Sophos, which reportedly laid off 450 staff members in January.
A filing with the U.S. Securities and Exchange Commission indicates that the restructuring plan was adopted on Wednesday. Zscaler has "committed to a plan to restructure and reduce the company's workforce as a part of its planned efforts to streamline operations and to align people, roles and projects to the company's strategic priorities," the company said in the filing.
Canessa added during the call on Thursday that the group will "continue to hire the best candidates in high-priority areas."
For Zscaler's fiscal Q2, revenue jumped 52 per cent year on year to $387.6m, slightly above the Wall Street analyst consensus estimate. Non-GAAP net income was 37 cents per share, beating analyst estimates by eight cents per share.