Splunk to Lay Off 7% of Workforce, Approximately 560 Employees, Ahead of $28 Billion Acquisition by Cisco

Job cuts mainly affect US staff and comes despite rising annual recurring revenue and reduced expenses; company insists layoffs are not a result of pending Cisco acquisition.

Splunk, an enterprise analytics software specialist, plans to lay off 7% of its workforce, primarily affecting US staff. The redundancy will involve around 560 employees, based on an estimate from a January SEC filing.
The layoffs are expected to cost the company approximately $42 million in severance payouts, transition costs, and additional expenses.
Despite the upcoming acquisition by Cisco for $28 billion, Splunk CEO Gary Steele asserts that the job cuts are not a result of this deal. Rather, these layoffs continue initiatives Splunk initiated a year ago to realign its resources and operating structure.
The company has been performing well financially with a 16% year-over-year growth in annual recurring revenue (ARR) at $3.858 billion, a 29% increase in cloud revenue to $445 million, and a substantial rise in operating cash flow by 247%. However, Splunk reported a net loss of $62.24 million for Q2 2024, an improvement from the previous year's Q2 net loss of $209.7 million.
When Cisco's acquisition is finalized, it plans to utilize Splunk's analytics capabilities to develop a novel, prediction-based cybersecurity product.