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Cybersecurity firm Deepwatch has laid off between 60 and 80 employees, representing a significant portion of its workforce, as part of a strategic restructuring to prioritize investments in artificial intelligence and automation. The company cited the need to accelerate its AI initiatives as the primary reason for the job cuts, reflecting a broader industry trend where cybersecurity vendors are increasingly leveraging advanced technologies for threat detection and response. This move follows a period of rapid growth and substantial funding, but also comes amid ongoing challenges in maintaining profitability and operational efficiency.
The layoffs at Deepwatch are part of a wider pattern in the cybersecurity sector, with other firms such as Axonius also announcing substantial staff reductions to sharpen their focus on AI-driven solutions. Deepwatch's CEO emphasized the company's commitment to evolving its business model to stay competitive in a rapidly changing threat landscape. While these changes are intended to enhance technological capabilities, they have raised concerns about the impact on the cybersecurity workforce and the long-term implications for talent retention in the industry.
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In November 2025, Axonius reduced its workforce by just under 100 employees, about 11% of staff. The company said the layoffs were intended to sharpen its focus and position the business for future growth despite recent expansion and funding.
In November 2025, Deepwatch laid off an estimated 60 to 80 employees, a double-digit share of its roughly 250-person workforce. The company said the cuts were part of a strategic realignment to accelerate investment in AI and automation amid financial and market challenges.
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The cybersecurity sector is undergoing significant transformation as organizations increasingly adopt artificial intelligence (AI) and generative AI tools to enhance security operations. Security teams are leveraging AI for tasks such as forensics, incident response, log analysis, and vulnerability management, which is fundamentally changing how cybersecurity work is performed. This shift is driving CISOs to rethink team structures and workflows, with a focus on upskilling and automating routine tasks to improve efficiency and allow professionals to concentrate on more complex challenges. Despite the benefits of AI integration, the industry faces persistent workforce challenges. Skills shortages have overtaken headcount as the primary concern, with many organizations struggling to find and afford professionals with the expertise needed to secure increasingly complex environments. Budget constraints remain a significant barrier, and while economic conditions are stabilizing, the gap between available skills and organizational needs continues to grow. The demand for specialized roles, such as security architects for cloud environments, is rising as companies accelerate cloud adoption and seek to bolster their security posture in the face of evolving threats.
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