Rapid7 to cut nearly 500 jobs

For more than a decade, Rapid7 chief executive Corey Thomas and his team have acquired smaller rivals to build a diversified cybersecurity company that competed across half a dozen distinct product lines. But Rapid7’s revenue growth has slowed over the past few years. and the company’s stock price, which peaked in November 2021 at more than $140 per share, closed at $39.79 on Tuesday before the company announced secondquarter earnings. That earnings announcement, released after the stock market closed, included a surprise beyond the financial results. Thomas said the company would cut 18 percent of its workforce, or nearly 500 jobs, shrink its real estate footprint, and make a shift away from the “everything” strategy. After the restructuring, Rapid7 will focus on providing security for customers’ cloud apps and offering integrated services that both look for cyber threats and engage countermeasures, a product known in the industry as Security Orchestration and Automation Response, or SOAR. The company declined to make Thomas, who has headed the company for almost 11 years, available for an interview. After the email went out, Thomas held a series of virtual town hall meetings with employees in different parts of the world to talk through the changes. The layoffs followed a review by an outside consultant that recommended cost cutting to improve profitability, the CEO told his employees. Still, many were shocked that Rapid7, which employed more than 2,600 people at the end of last year, would make cuts when it was still growing. Revenue in the second quarter grew 14 percent to $190 million, though that was less than half of the 32 percent growth rate in the second quarter of 2022. The company also posted a net loss of $67 million for the quarter, but excluding some costs such as stock-based compensation, reported an adjusted profit of $12 million.