Cloud security startup Lacework, which employed 1,000+ in March 2022, lays off 20% of its workforce; Lacework has raised $1.85B including $1.3B in November 2021
ProtocolKyle Alspach
Context & Ripple Effects
Lacework’s headcount reduction follows a rapid funding arc, from its earlier $24M Series B and $42M round to a $1.3B financing at an $8.3B valuation in late 2021. The cut matters because the company had only recently reported a workforce of more than 1,000.
The move also sits within a broader pullback among heavily funded security and privacy vendors: later coverage counted Lacework among companies reducing staff, while Fortinet eventually reached a deal to acquire Lacework.
First-order effects
About 200 Lacework employees are affected, and the company’s operating capacity shrinks after a period of expansion funded by $1.85B in total capital.
Lacework’s investors and remaining workforce must recalibrate around a materially smaller organization than the one built following its 2021 financing.
Second-order effects
Lacework joins other cybersecurity and privacy companies, including OneTrust, in cutting staff, making post-fundraising headcount reductions a more visible competitive constraint for large private security vendors.
The contrast between Lacework’s $1.3B round and its subsequent layoffs raises the premium on translating large financings into durable operating scale rather than rapid hiring.
Third-order effects
Lacework’s later acquisition agreement with Fortinet points to a possible consolidation path for heavily financed standalone cloud-security vendors whose expansion plans contract.
If this pattern persists, cloud-security market structure will tilt toward larger incumbent buyers absorbing independently funded providers after growth plans are reset.
The trend: Cloud-security funding is increasingly being followed by tighter operating discipline and, in some cases, consolidation into established security platforms.
Just in: @Lacework - data-driven security platform for the cloud - lays off ~300 employees, about 20% of staff today. The layoffs come 6 months after the company raised $1.8B, valued at $8.3B. Some people let go were hired 1-2 months ago. Company yet to post an announcement.
This is a surprise, because Lacework was aggressively hiring until recently. It's another sign of companies reducing costs in anticipation of a downturn. https://twitter.com/...
I had an amazing offer from Lacework in December. It was rescinded after everything was signed because there legal team said there was a conflict with my location. I would have been laid off today 🥲 There are amazing folks there any company would be lucky to have. https://twitter…
I started at lacework 2 months ago, and yesterday I learned I am no longer a lacework employee. So... I'm back on the job market. Who's hiring developer relations people? https://ali.dev/ https://blog.ali.dev/ my DM's are open, RTs appreciated ❤️ https://twitter.com/...
Have seen this story before, this is the first of MANY companies that will never get back to their inflated private valuations. https://twitter.com/...
Interesting to see that security companies aren't immune to the market effects we're seeing. Will be interesting to see if they're just playing it safe, or if we'll see more security unicorn layoffs. Gotta wonder how many of the 54 cybersecurity unicorns are legit unicorns tho ht…
@GergelyOrosz ... Any massively overvalued startup is a layoff risk now because they need to keep their burn rate in check so that they don't suffer a down round. Laceworks is in a well-needed area of cloud security which should be recession proof. Surprised to hear about the lay…