Sophos Lays Off 6% of Workers Following Secureworks Purchase

Platform security stalwart Sophos has laid off 6% of its workforce just days after completing its $859 million acquisition of cybersecurity services vendor Secureworks.

See Also: A Modern Approach to Data Security

Oxford, U.K.-based Sophos said the job cuts will streamline duplicative roles following the Feb. 3 close of the Secureworks transaction as well as reduce positions that are no longer needed since Atlanta-based Secureworks delisted as a public company. Secureworks was publicly traded from April 2016 until its sale to Sophos, with Dell owning 79.2% of Secureworks’ Class A stock and Michael Dell serving as board chair (see: Sophos Fortifies XDR Muscle With $859M Secureworks Purchase).

“We are making organizational changes that include some role eliminations and the start of consultation periods where required,” Sophos told Information Security Media Group in an email. “Staff changes and redundancies are difficult at any time, and we deeply appreciate the contributions of our collective employees globally who have worked hard to bring both companies to where we are today.”

Thoma Bravo-owned Sophos said it will provide laid off employees with financial support, well-being resources and career transitional services. Sophos said it’s increasing investments in essential competencies through the buy of Secureworks as well as hiring other new leaders and experts in key departments. Key hires in recent months include Chief Revenue Officer Torjus Gylstorff and Americas Sales Head Jon Bove.

Sophos didn’t respond to a question about how many individuals will be impacted by the layoffs, but the combined organization employed roughly 6,350 people, with some 4,850 from the Sophos side and just over 1,500 from Secureworks, according to IT-Harvest and regulatory filings. A 6% reduction from a staff that size would have impacted approximately 380 people.

Layoffs Follow Years of Deep Job Cuts at Secureworks

This is neither organization’s first round of layoffs. The size of Secureworks’ workforce has fallen by nearly 44% in recent years, with headcount plummeting from 2,696 employees on Jan. 29, 2021, to just 1,516 workers on Feb. 2, 2024, according to regulatory filings. And the share of Secureworks employees based in the United States has dropped from 55.7% in early 2023 to 50.1% in early 2024.

IT-Harvest found that Sophos’ headcount dipped 5.7% from 4,727 in late 2022 to 4,460 in mid-2023, with the company announcing in January 2023 that it planned to cut 10% of its workforce – or roughly 450 employees – amid a shift to managed detection and response services. But since June 2023, Sophos’ workforce has grown by 13.7%, with more people working at the vendor today than before the layoffs (see: Sophos to Lay Off 10% of Workers Amid Shift to MDR Services).

Sophos, which first began offering antivirus and encryption products in 1985, seeks to turn the Secureworks business around after years of decline. The vendor’s sales for the fiscal year ended Feb. 2, 2024, fell to $365.9 million, down 21.1% from $463.5 million the prior year. And prior to the Sophos acquisition announcement, Secureworks’ stock is down nearly 70% from its all-time high of $25.98 per share in September 2021.

Secureworks carried out two rounds of layoffs in 2023, axing 9% of its staff – or roughly 212 employees – in February 2023 as Chief Financial Officer Paul Parrish and Chief Threat Intelligence Officer Barry Hensley left their posts. Then in August 2023, Secureworks cut another 15% of its staff – or roughly 322 positions – as the company pursued high-growth products and improved operating margins (see: Secureworks Lays Off Another 322 Staffers to Improve Margins).

Forrester didn’t include Secureworks in its 11-vendor evaluation of the XDR market in June 2024, while Sophos was the eighth highest-rated vendor, ahead of Trellix, Broadcom and Fortinet. Forrester praised Sophos for integrating native tools and third-party data from Google and Microsoft, but said the security analyst experience falls short, with little contextualization and cumbersome management.

Secureworks fared better in Forrester’s 13-vendor evaluation of the managed detection and response market, placing fourth behind only Expel, CrowdStrike and Red Canary. The analyst firm praised the company for rapid time to value as well as pivoting to blend platforms, products and services, but chided the company for subpar dashboards and reporting and less customizable interface fields.