Source: Israeli cybersecurity startup Cybereason laid off 200 employees, or 17%, after letting ~100 staff go in June and filing for a US IPO earlier in 2022
Meir Orbach / CTech :
Context & Ripple Effects
Cybereason's year has unraveled fast: it filed for a US IPO early in 2022, then abandoned the listing and hired JPMorgan to find a buyer at its $2.5B valuation — a process reported just days before these cuts. The company is SoftBank's longest-running Israeli cyber bet, dating back to its $50M investment in 2015.
The layoff lands mid-retrenchment across high-valuation security startups: rival Snyk cut 198 employees, or 14% of staff the same week despite an $8.5B peak mark. The arc closes out years later — Cybereason eventually raised a $120M round led by SoftBank, Vision Fund 2, and Liberty amid claims from its ex-CEO that it had been close to bankruptcy.
First-order effects
- 200 employees — about 17% of staff — are cut immediately, on top of ~100 departures in June, making this Cybereason's second reduction in a single year while its exit options narrow to a sale.
- CEO Eric Gan, installed by lead investor SoftBank in place of co-founder Lior Div, now runs a cost-cutting company whose IPO filing is effectively shelved.
Second-order effects
- Snyk's nearly identical layoff days earlier forces every late-stage cybersecurity unicorn valued off 2021 marks to defend burn rates, since buyers like the JPMorgan-run process will price them against peers' shrinking headcount.
- SoftBank's dual role — largest backer and source of the CEO — puts its other growth-stage portfolio companies under pressure to show similar discipline before their own funding conversations.
Third-order effects
- If the pattern holds, 2021-vintage cyber valuations reset through distressed sales and rescue rounds rather than listings — exactly the path Cybereason followed from IPO filing to sale search to a later $120M lifeline.
- Israeli cybersecurity's funding engine bifurcates: capital concentrates in new categories like data security (see Cyera's successive mega-rounds) while the prior generation of endpoint-detection unicorns absorbs the correction.
The trend: Late-stage cybersecurity startups priced at 2021 peaks are trading public-listing ambitions for layoffs and sale processes, with investors forcing the reset company by company.