XM Cyber prepares for major layoffs after $600 million CrowdStrike deal
Employees are expected to receive stock-option payouts worth tens of millions of dollars collectively, while those who remain will be offered retention bonuses.
Israeli cybersecurity company XM Cyber is preparing for a major restructuring expected to include significant layoffs, including among its hundreds of employees in Israel, following the sale of its intellectual property to U.S. cybersecurity giant CrowdStrike for approximately $600 million.
The deal is expected to generate payouts for employees holding stock options. According to the company, employees will benefit from the exit in accordance with the options they hold, with market estimates putting the total value of the employee payouts at tens of millions of dollars. Employees who remain with the company are also expected to receive substantial retention bonuses, intended to keep them on board in the coming years.
The restructuring will reshape a company that has spent the past five years under German ownership. Most of XM Cyber’s employees are expected to remain within Schwarz Group, while a smaller number will move to CrowdStrike. The company is expected to adjust its workforce to reflect its operations following the technology sale, although the scale of the planned layoffs has not been disclosed.
The transaction transferred XM Cyber’s intellectual property, including its source code and more than 45 patents, to CrowdStrike. It did not include XM Cyber’s customers or revenue. The company will continue operating as a standalone business under a licensing arrangement with CrowdStrike, while its existing commercial operations remain with Schwarz Group.
The deal’s full value emerged following its closing. CrowdStrike initially disclosed $145 million in consideration, comprising cash and shares, plus additional shares to be determined at closing. A subsequent regulatory filing showed that it issued 2,118,022 shares to an affiliate of Schwarz Group. At a share price of $208, those shares were worth approximately $441 million, putting the implied total consideration at roughly $586 million, or nearly $600 million.
For employees, the transaction brings a potentially significant financial benefit at a time of considerable uncertainty over the company’s future workforce. The stock-option proceeds and retention bonuses could reward employees for the value built at XM Cyber, while the restructuring is expected to leave many workers facing the prospect of losing their jobs.
XM Cyber was founded in 2016 by former Mossad chief Tamir Pardo, together with Noam Erez, Boaz Gorodissky and businessman Shaul Shani. The company develops technology that helps organizations identify attack paths through their networks and prioritize security weaknesses that could be exploited by attackers.
In 2021, Schwarz Group acquired XM Cyber for $700 million. The latest transaction gives CrowdStrike access to the company’s technology while allowing Schwarz Group to retain the operating business and its customer relationships.
