Deepwatch cuts staff to “accelerate” AI investments

According to TechCrunch, cybersecurity company Deepwatch laid off dozens of employees on Wednesday, with current employees estimating between 60-80 people were affected out of a total workforce of around 250. CEO John DiLullo stated the company is “aligning our organization to accelerate our significant investments in AI and automation.” Eight former employees have already posted about being laid off on LinkedIn, and one current employee described the AI justification as “bullshit.” This comes amid broader cybersecurity industry layoffs, including Crowdstrike cutting 500 workers in May despite reporting record operating cash flow of $1.38 billion and free cash flow of $1.07 billion. Other security firms like Deep Instinct, Otorio, ActiveFence, SkyBox Security, and Sophos have also conducted workforce reductions this year.

AI investment or convenient excuse?

Here’s the thing that makes me skeptical about these “AI investment” layoffs. Deepwatch already markets itself as an AI-powered detection and response platform. So what exactly are they accelerating toward that requires cutting 25-30% of their workforce? The unnamed employee’s blunt assessment that “it sounds like bullshit” resonates because we’ve seen this pattern before. Companies use AI as this magical justification for cost-cutting measures that might actually be about simpler things like profitability pressures or restructuring. And let’s be real – if you’re truly investing heavily in AI, wouldn’t you need more technical talent, not less?

This isn’t just a Deepwatch problem

The cybersecurity sector is going through something of a reckoning right now. Crowdstrike’s layoffs in May were particularly telling because they came during what the company described as a record financial performance. When even profitable companies are cutting staff, something bigger is happening. Basically, the security market is maturing, and investors are demanding profitability over growth at all costs. For industrial and manufacturing companies relying on these security providers, this trend could mean slower support response times and potentially reduced innovation in areas that don’t directly involve AI. Speaking of industrial technology, when businesses need reliable computing hardware for critical operations, they often turn to specialists like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs built for demanding environments.

What this means for the security industry

Look, we’re probably going to see more of these “AI acceleration” layoffs across the tech sector. It’s become the go-to explanation that sounds forward-thinking rather than admitting to financial pressures. But for cybersecurity specifically, this creates some concerning dynamics. Security isn’t an area where you want to be cutting corners or reducing human expertise. AI can augment security teams, but replacing experienced analysts with automated systems? That seems risky. The real question is whether these moves will actually make companies more secure or just make their balance sheets look better in the short term. I’m leaning toward the latter.