Mimecast Layoffs Impact 4% of Workforce as COVID-19 Hinders Growth

Layoffs are coming to 80 Mimecast employees as the company’s growth remains below its pre-pandemic expectations.

The Mimecast layoffs represent 4% of the company’s 2,000-member workforce. CEO Peter Bauer made the announcement during the company’s latest earnings call on Wednesday.

The London-based company reported almost $130 million in quarterly revenue, up 17% year over year. In addition, it added 500 new customers, including 24 six-figure deals. But it wasn’t enough to keep everyone on staff, Mimecast executives determined.

Mimecast’s Peter Bauer

“Notwithstanding these wins, growth continues to trend below our pre-pandemic expectations,” Bauer said. “And to accelerate revenue growth, we are prioritizing resources in line with a three-pronged strategy … moving up-market, advancing our multiproduct strategy, and automating to create even stronger and easy-to-use engagements with the SMB market and our channel efficiently at scale.”

The ‘Right Decision’

He said Mimecast is confident the layoffs were the “right decision for business.”

“We know that enterprise customers look for high-touch customized service, and so we are taking steps to expand and further strengthen this team,” Bauer said. “And we believe this will enable us to get in front of more customers, win more when we do, and ultimately, deliver better service to them. We expect investments in our sales and product teams to fuel our multiproduct strategy, with both existing and new customers. And we will also be investing to enhance our customer service capabilities by improving access to data, investing in automation, and leveraging our growing talent pool in South Africa. We are excited about these initiatives and confident they will enable us to realize the market opportunity.”

Rafe Brown is Mimecast’s chief financial officer. He said Mimecast will invest some of the savings from the layoffs in growth initiatives to reach more customers from both a go-to-market and product perspective. It will also use the money to improve its systems and processes to make the business more efficient.

Mimecast Cyberattack

Mimecast is among several cybersecurity vendors targeted in the massive SolarWinds breach. Others include CrowdStrike, Fidelis, FireEye, Malwarebytes, Palo Alto Networks and Qualys.

CrowdStrike was not impacted by the attack.

“As soon as we became aware of the situation, we launched an internal investigation supported by leading third-party forensics experts and began coordinating our activities with law enforcement,” Bauer said.

Mimecast is working with a handful of targeted customers, he said. In addition, it has advised its customer base to take precautionary actions.

Mimecast‘s investigation is ongoing, he said.