Proofpoint Lays Off 6% of Workforce, Offshores JobsPrivate Equity-Owned Firm Lets 280 People Go, Moves Jobs to Argentina and Ireland
Silicon Valley email security firm Proofpoint is laying off 280 positions two months into the tenure of Sumit Dhawan as its chief executive officer.
The layoffs amount to roughly 6% of the company's workforce of 4,500. A company spokesperson said Proofpoint anticipates moving half the eliminated positions to overseas units in Argentina and Ireland by midyear.
The layoffs are "deeply rooted in our forward-looking company strategy," the spokesperson said, adding that shedding jobs should result in fewer management layers. "Coupled with continued hiring aligned with our key priorities, we expect to end 2024 with a similar headcount to where we started the year."
Private equity firm Thoma Bravo acquired the then-publicly traded company in 2021 in a $12.3 billion cash transaction, one of the largest private equity transactions in cybersecurity.
The company churned through four permanent or interim leaders since then, landing on former VMware top executive Dhawan in November as its new CEO (see: Proofpoint Snags Former VMware President Sumit Dhawan as CEO).
The company's Thomas Bravo era involved numerous acquisitions, including Boston-based cloud email security provider Tessian in October and New York-based deception firm Illusive in December 2022. Only months after falling under the Thoma Bravo umbrella, Proofpoint bought New York-based artificial intelligence-based data classification firm Dathena.
Cole Grolmus, a senior advisor to the research team at Momentum Cyber, told Information Security Media Group it's unlikely the layoffs are indicators that Thoma Bravo is prepping the company balance sheet for a sale or a return to public trading.*
"Proofpoint is about two-and-a-half years into Thoma Bravo's holding period," he said. "An exit at this stage for private equity would be atypical." A representative for Thoma Bravo did not immediately return a request for comment.
The company's biggest challenge since its sale to the private equity firm has been in shoring up growth and profitability, since its revenue was already large at the time of the sale, Grolmus said. There's an increasing gap, he said, between high and low performing companies in the cybersecurity market "and the fate of the low growth segment has not been quite as good."
*Updated Jan. 31, 2024 21:39 UTC: Adds comment from Cole Grolmus.