Below is an email our CEO sent to our employees today followed by an all-hands call regarding reductions on our team.
Today, I have some difficult news to share regarding reductions at Deepwatch. After careful consideration, we have made the challenging decision to implement a reduction of 7% of our team members – 30 employees from our 450 person team. The majority of the reductions were in our Sales and Marketing team.
While Deepwatch has been experiencing impressive growth, we are seeing macroeconomic conditions extend our sales cycles by an average of two months with some deals pushed entirely. We anticipate continued economic headwinds in the second half of this year. We made the reductions to align with our second half projections and longer term goals to ensure we are best positioned for strong growth and profitability in the future. This began with our leadership team conducting a thorough analysis of operations and strategic plans, and that led us to slow hiring beginning in Q2. This slowdown in hiring resulted in fewer reductions today. We have also implemented reduced spending in other areas of discretionary spend including changing our 2024 CKO to remote, canceling our 2024 Pinnacle trip, and scaling back travel and marketing programs.
We recognize the impact this has on our affected employees, and we are committed to supporting them during this transition. We are providing every impacted team member with severance packages, three months of COBRA stipends, and assistance in job searches. All Deepwatch employees are granted stock options and we will extend timelines to provide more flexibility for those who want to exercise these. Our people team will be available to address any questions and to provide support throughout this process. I am very sorry for those who were impacted. We deeply appreciate the dedication and contributions from each of our impacted team members. They have all played a role in our growth and success.
Moving forward, our focus remains steadfast on our mission to protect our customers. Customers will continue to experience the support, personal touch and innovation they have come to appreciate. This will not impact our customers in any way. We will also continue to support the health and professional development of our employees including career and individual growth with training initiatives and our annual professional development stipend. Our commitment to delivering exceptional managed security outcomes and helping create a safer digital economy remains unwavering.
The macroeconomic headwinds are affecting many industries. We’ve seen many of our competitors make reductions and numerous companies across the cyber and tech ecosystem have done so. In spite of the difficult actions we took today, we are in a good position to continue ascending as the Enterprise MDR Category leader. Overall we are optimistic about our future. Our board and investors are fully supportive of our go-forward strategy and remain confident in our business. They share our long-term optimism and commitment to guiding Deepwatch through these challenging times and emerging stronger than ever.
Later today, we will be holding an All Hands call where I will provide additional information about our strategy and plans for the future. I encourage you to join the call to gain a comprehensive understanding of our go-forward approach.
Lastly, I want to express my gratitude to each and every one of you for your understanding, support for our impacted team members, and your continued dedication to our customers, our team and the success of Deepwatch. Together, we will navigate these challenges and emerge as a stronger and more resilient organization.
Thank you for your commitment and support.