FireEye to Lay Off Hundreds, Blames Ransomware
The security firm sees growth continue to slow as clients fall prey to simpler, easier-to-clean-up attacks, but analysts point to competition.Smaller ransomware incidents account for more attacks, outpacing large compromises involving hundreds of systems—a trend that bodes well for businesses but less well for some security firms—according to threat-protection and response firm FireEye. On Aug. 4, FireEye announced that the company's earnings fell short of analysts' forecasts and, among other factors, blamed criminals' move to quicker ransomware attacks and away from drawn-out compromises. As a result, the company responded to incidents that were shorter in duration and smaller in size than in the past, Kevin Mandia, FireEye's recently appointed CEO, said during the company's earnings call. "While our services personnel are responding to more attacks this year than prior years, the scope and scale of these attacks is simply different," Mandia said. "The scale and scope went from hundreds of compromised machines by attackers who wanted to maintain and keep access to more of the ransomware-type attacks and extortion attack that are simply easier to remediate at times." The bottom line for FireEye: The more focused attacks are good news for companies trying to clean up but mean less revenue for the service providers that help them recover.
FireEye grew in the second quarter, with revenue of $175 million, up 19 percent year-over-year , but that figure fell short of the company's guidance to analysts. While the company had 40 engagements exceeding $1 million, none of its service calls exceeded $10 million, reducing its average revenue per response. The company plans to lay off between 300 and 400 employees as a cost-saving measure, about 9 percent of its controllable costs, the company said.