Okta, the San Francisco-based identity security company announced plans to reduce its workforce by 5%, or approximately 300 employees, in an effort to reduce operating expenses and improve profitability. Okta CEO Todd McKinnon tells employees in an email that the company entered 2022 with a growth plan based on demand seen in 2021, which resulted in overhiring given today’s macroeconomic reality.
Okta’s stock went up $5.35, or 7.03%, in premarket trading Thursday to $81.50 per share, the highest it has traded since Aug. 31.
That was the day Okta revealed its $6.5 billion acquisition of Auth0 had caused confusion for the company’s combined sales force because they didn’t know which customer identity and access management tool to sell in which scenario, fueling staff turnover.
Okta’s net loss increased to $662.1 million, or $4.21 per share, in the first nine months of its fiscal 2023 year, 9% higher than the $607.2 million, or $4.17 per share, net loss recorded in the first nine months of fiscal 2022. During the same time period, Okta’s sales increased 46.9% to $1.35 billion, up from $917.2 million the previous year.
Only OneTrust and Sophos have cut more workers than Okta among the more than 40 pure-play cybersecurity vendors that have disclosed layoffs since the start of the economic downturn in May 2022, according to Layoffs. FYI. Atlanta-based privacy firm OneTrust laid off 25% of its workforce, or 950 employees, in June, while Oxford, U.K.-based platform security vendor Sophos laid off 10% of its workforce, or 450 employees, in January.
Okta employees in the United States will receive at least 13 weeks of additional pay, healthcare benefits until June 30, and the ability to vest stock until March 15. They will also be eligible for an annual bonus or sales incentive in the fiscal year that ends on January 31, 2023.
A number of high-profile Okta executives have left the company. According to The Information, Okta’s Chief Revenue Officer Steve Rowland and President of Worldwide Field Operations Susan St. Ledger left the company in January after less than two years. Diya Jolly left the company in October after four years as chief product officer, and Chief Operating Officer Frederic Kerrest is taking a year off.
Since the beginning of 2022, the company has been dealing with its own cybersecurity issues, as two Okta customers’ tenants were accessed and applications such as Slack and Jira were viewed by Lapsus$ during a January 2022 cyberattack. Okta’s private GitHub repositories were then accessed in December, resulting in the theft of source code from its Workforce Identity Cloud code repository.
