CyberArk layoffs cost Palo Alto an estimated $60 million
Palo Alto's annual report provides a detailed accounting of the workforce restructuring that affected hundreds of employees following the acquisition. The company has already recognized $49 million in severance charges and made $18 million in cash payments.
Palo Alto Networks has put a $60 million price tag on the workforce cuts following its acquisition of CyberArk, according to its annual report, offering a clearer picture of the financial cost of the restructuring that affected hundreds of employees at the cybersecurity company.
The estimate, disclosed in the report filed in September for the fiscal year ended July 31, 2026, recognized $49 million in severance charges during fiscal 2026, comprising $32 million in cash compensation and $17 million in share-based compensation. It made $18 million in cash payments under the plan during the year, while a further $14 million in severance liabilities was recorded as accrued compensation as of July 31.
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Palo Alto building alongside CyberArk building.
(Photo: David Paul Morris/Bloomberg, ShU studio/Shutterstock)
The $60 million estimate covers the total expected cost of the workforce optimization plan, rather than an additional expense still to be paid. The difference between the estimated total and the $49 million already recognized suggests that approximately $11 million had yet to be recorded at the end of the fiscal year. Palo Alto did not separately disclose when the remaining charges would be recognized.
The company said the plan is expected to be “substantially complete” by the end of fiscal 2027, which closes in July 2027. That timeline reflects the extended transition arrangements made for some employees. When Palo Alto began notifying CyberArk staff in February, CTech reported that affected workers were given notice periods ranging from three to 12 months, with some expected to remain for up to a year to help with the integration. Under Palo Alto's accounting policy, severance costs are recognized when employees are notified, while expenses for those required to remain beyond the minimum retention period are recognized over the additional service period.
Palo Alto completed its acquisition of CyberArk on February 11, and employees received emails about their positions the following day. Around 700 employees are believed to have been let go, including around 100 in Israel.
The company said the organizational changes affected “a small portion of the combined workforce” and were focused primarily on overlapping roles.
Palo Alto's total headcount rose to 21,921 employees as of July 31, 2026, up from 16,068 a year earlier. The increase included approximately 4,223 employees added through the CyberArk acquisition.
The company has also emphasized its intention to continue expanding its Israeli operations. Before the acquisition, Palo Alto employed approximately 1,600 people in Israel and said the CyberArk deal was expected to roughly double its local workforce.
