“Sophos is implementing an internal restructuring to respond to changing market situations related to COVID-19. . . A restructuring is a complicated decision, but we believe it is necessary,” the company told CRN.
Sophos plans to cut up to 16% of its workforce and close some offices just 3 months after it acquired through personal equity firm Thoma Bravo, according to media reports.
Sophos showed the restructuring to the CRN, but did not respond to questions about how many staff would be affected and for what purposes or geographies. Thoma Bravo did not respond to a request for comment.
The Abingdon, U. K. -based platform security provider has already begun downsizing as the coronavirus pandemic forces Thoma Bravo to take action for Sophos’ near-term outlook and drive the company’s strategic transition, according to Private Equity News. about 16% of Sophos’ total workforce, Private Equity News reported.
[Related: Sophos considers more mergers and acquisitions after closing deal with Thoma Bravo worth $3. 9 billion]
“Sophos is implementing an internal restructuring to respond to changes in market situations related to COVID-19 and to drive the evolution already underway toward our next-generation product portfolio,” the company said in a statement. “A restructuring is a difficult decision, however, we believe it is imperative to position Sophos for continued expansion and good luck in the coming years. “
Job cuts are affecting staff in a number of divisions and geographies; according to The Register website, the United Kingdom is considered the most affected country. About 100 employees, most of them from Sophos’ advertising engineering division, were informed last week that their facilities would no longer be needed, The Register reported.
The company intends to continue hiring for positions that align with its transformation plan and will hire staff affected by task cuts for those positions, if appropriate, Private Equity News reported. For the quarter ended March 31, Sophos said it billed its next-generation products. It increased 37% year-over-year and now accounts for more than 63% of the company’s total business.
Sophos employs 3,400 people across 51 offices, according to the company’s 2019 annual report. The company has no plans to close any of its U. K. facilities, according to Private Equity News.
According to the company’s 2019 annual report, more than 77% of Sophos’ 3,400 employees are founded in one of five countries: India, with 819 workers; the United States, with 607 workers; the United Kingdom, with 589 workers; Germany, with 310 employees; and Canada, with 305 workers. Sophos has offices in 8 countries, with 10 seats in India; 4 locations in the U. S. ; 3 sites in Germany and China; and two sites in Canada, Austria, Italy, and the Netherlands.
The task cuts deviate from the expectations set by Thoma Bravo when it first announced the $3. 9 billion acquisition of Sophos in October. At the time, Thoma Bravo said he did not expect a review of Sophos’ business and operations within six months of the deal resulting in significant relief in the workforce. The acquisition was finalized in March.
Thoma Bravo said he values the skills, wisdom and experience of Sophos’ control and workers and expects that control and existing workers will be key to the company’s long-term success. Sophos CEO Kris Hagerman reaffirmed to CRN in February, prior to the onset of the COVID-19 pandemic, that no significant restructuring of the company’s operations under Thoma Bravo was expected.
The personal equity company said in October that it plans to explore opportunities to streamline operational functions at Sophos to help drive revenue growth. Thoma Bravo also said at the time that it plans to reduce spending on existing non-essential products as it expands. investment in spaces such as endpoint security and next-generation networks, which are expected to improve the visitor experience.
Thoma Bravo also announced in October that it also plans to reduce non-critical administrative pricing at Sophos, as well as expenses similar to those for go-to-market systems that saw a decline in return on investment. The personal equity firm has delved deeper into cybersecurity with purchases of Barracuda Networks, LogRhythm, Imperva, Veracode and Centrify, but last month sold Idaptive to CyberArk for $70 million.