Rapid7, a Boston-based cybersecurity firm, plans to cut 18% of its workforce and permanently close certain office locations as part of a restructuring plan, the company said in a filing with the Securities and Exchange Commission Tuesday.
The company said it will incur between $24 million and $32 million in charges related to the restructuring, including employee transition, severance payments, employee benefits and other costs. The cuts will impact roughly 470 employees.
The company reported a net loss of $66.8 million in the second quarter on revenue of $190 million.
The restructuring follows months of speculation that Rapid7 is pursuing a sale. The company has been actively involved in acquisitions of other firms, including a March deal to acquire Minerva Labs.
Reuters reported earlier this year that Rapid7 was exploring a possible sale and had retained Goldman Sachs.
Company CEO Corey Thomas announced the restructuring and layoffs in an email to employees before the earnings report on Tuesday.
“While it may be surprising to take this measure when we are meeting performance expectations, making decisions from a place of strength allows us the opportunity to restructure intentionally,” Thomas said in the email, which was posted in a blog.
The company engaged an outside advisor prior to the restructuring and the recommendation was to reduce the size of the company in order to become more efficient “while remaining a growth oriented company with capacity to make strategic customer investments,” Thomas said.
Every part of the company would be impacted, however sales and engineering would face more substantial shifts, Thomas said.
The majority of the restructuring charges will be incurred during the third and fourth quarters of 2023, according to the SEC filing. The company will also record a $4 million impairment loss related to the closure of certain office locations.
Dragos, an industrial cybersecurity specialist, disclosed plans to cut 9% of its workforce back in May amid a slowdown in sales.
The cybersecurity sector has been impacted by a drop in new investment funding and weakness in regional banks, particularly the collapse of Silicon Valley Bank, which was a major lender to tech startups.
