The opportunity for tech startups to go public remains largely offline with the stock market suffering, prompting a second wave of cost-cutting and job losses at some Boston companies.
Cybersecurity companies Snyk and Cybereason this week announced significant layoffs after having already trimmed their workforces during the summer.
At Snyk, almost 200 people will be cut, or 14 percent of the company’s workforce. That follows a smaller cut of 5 percent in July at the company, which helps software developers avoid security weaknesses in applications.
“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,” chief executive Peter McKay wrote in an e-mail to employees.
Snyk’s chief legal officer Karyn Smith and senior vice president for strategy Aner Mazur are also leaving the company.
At Cybereason, chief executive and cofounder Lior Div said in a blog post that the company is cutting 17 percent of its workforce after laying off 10 percent in June.
The company, which detects and responds to hacking attacks for its customers, declined to specify the number of jobs being cut. Cybereason employs more than 1,100 people, according to LinkedIn.
Last year, Cybereason raised $275 million in a deal valuing the company at more than $3 billion, with backers including Liberty Strategic Capital, a private equity firm started in 2021 by Donald Trump’s secretary of the treasury, Steven Mnuchin. Meawhile, Snyk raised $300 million at an $8.5 billion valuation.
Both were looking forward to going public in 2022. But with tech stocks down and the IPO market offline, the companies need to shift from burning cash to fuel rapid growth to preserving resources to reach profitability sooner.
“As you all know, less than a year ago we were marching toward an IPO and in the process, invested aggressively in R&D, sales, and marketing,” Div wrote. “While we are making significant traction in these areas and our growth remains strong, we are seeing significant volatility in the global financial markets that require us to prioritize profitability over growth.”
The cuts follow similar moves at other Boston tech startups that have had to curb their rapid expansion. Fellow cybersecurity company Aura has made cutbacks, along with artificial-intelligence firm DataRobot, Internet service Starry, and exercise equipment maker Hydrow.