McAfee To Lay Off Up To 60, Close Israeli Development Center: Reports
McAfee is expected to move its Israeli operations overseas as a cost-cutting measure, meaning that most of the 50 R&D employees and 10 salespeople at the Tel Aviv facility will be laid off, Globes reported.
McAfee plans to shutter a development center in Israel next week and lay off most of the 60 employees working there, according to media reports Tuesday.
The San Jose, Calif.-based platform security company is expected to move its Tel Aviv operations overseas as a cost-cutting measure less than three months after going public, according to Globes. Most of the 50 research and development employees and 10 salespeople at the Tel Aviv facility will be laid off when the facility closes Jan. 21, Globes said. McAfee didn’t immediately respond to a CRN request for comment.
McAfee’s stock jumped up $1.19 per share (6.5 percent) Tuesday to $19.49 per share, which is the highest the company’s stock has traded since a Oct. 22, 2020 initial public offering that valued the company at $9.5 billion.
[Related: McAfee EVP, Chief Product Officer Ash Kulkarni To Resign Post]
The soon-to-be-shuttered Israeli development center has been involved in McAfee’s development of several security products such as MVision Insights and McAfee Unified Cloud Edge, according to Calcalist. McAfee revealed last year that the Tel Aviv center also plays a role in data loss prevention (DLP) activities, Calcalist reported.
McAfee’s development operations in Israel had been based on the 2006 acquisition of compliance vendor Onigma for $20 million, the 2012 purchase of database security company Sentrigo for $30-40 million, and the 2012 buy of security intelligence company Insightix for $4-5 million, Globes reported.
In September 2019, Cohavit Almagor was brought over from Palo Alto Networks to lead McAfee’s Israeli R&D operations, according to Globes. The company’s Israeli commercial operations are led by Yaniv Nezri, who’s been with McAfee since March 2015. McAfee employed more than 6,850 people worldwide as of June 27, 2020, according to a U.S. Securities and Exchange Commission (SEC) filing.
Onigma Founder Liad Agmon told Globes he wasn’t surprised by McAfee’s shuttering of its Israeli development facility. Agmon blamed the closure of the strength of the Israeli shekel as well as Israeli government indifference to the needs of the high tech industry.
McAfee’s layoffs come a month after Chief Product Officer Ash Kulkarni resigned following two years spearheading McAfee’s product strategy and execution in the company’s enterprise business group. Kulkarni has since joined Mountain View, Calif.-based search software vendor Elastic as chief product officer.
Kulkarni was replaced at McAfee on an interim basis by Shishir Singh, who previously oversaw the company’s web protection, data protection, CASB and network security products. Beyond its California headquarters, McAfee conducts finance, accounting, sales and marketing and administrative activities in Texas, R&D in India and Argentina, and sales and operations in Ireland, the U.K., Canada and Japan.
Also departing McAfee in early 2021 was Skyhigh Networks Co-Founder, Chief Scientist and SVP Engineering Sekhar Sarukkai, who had been a vice president and fellow at McAfee since the company acquired Skyhigh Networks for $590 million in January 2018. Sarukkai has served as a facility member at the University of California, Berkeley since last year, according to his LinkedIn page.
In its first earnings release as a publicly traded company, McAfee disclosed that sales for the quarter ended Sept. 26, 2020, had increased 10 percent to $728 million. The company broke even from a profitability perspective, which was improved from a net loss of $9 million in the quarter ended Sept. 28, 2019.