Splunk today announced a reduction of approximately 7% of its global workforce, which could affect more than 500 employees. The decision comes less than two months after the company announced it would be acquired by tech giant Cisco in a deal valued at approximately $28 billion.

In a message to employees, Splunk CEO Gary Steele noted the layoff move is not a direct result of the Cisco acquisition but a continuation of initiatives that have been in place for over a year.

“As we work to finish FY24 and look ahead, we are taking this proactive and strategic step that further aligns our workforce to better enable Splunkers to meet the needs of our customers and partners, while remaining sustainable and cost effective,” Steele wrote.

“The changes we are announcing are not a result of our agreement with Cisco; they are the continuation of the important initiatives we’ve undertaken across Splunk for more than a year to align our resources and operating structure to deliver ongoing and incremental value for our customers,” he added.

According to its SEC filings, Splunk had approximately 8,000 employees in January, and the company had already reduced its workforce by 4%, as announced in February. This means that the latest round of layoffs could affect more than 500 employees.

Splunk also noted in its latest Form 8-K filing today that the workforce cut will be mostly in the U.S., which will result in approximately $42 million in charges. The company expects to complete substantially all of the actions associated with the layoffs by April 30, 2024, subject to local law and consultation requirements.

Headquartered in San Francisco and founded in 2003, Splunk offers a unified security and observability platform. The security vendor’s signature services are its security information and event management (SIEM) tools — Splunk Enterprise for on-premises or private cloud and cloud-based Splunk Cloud. The vendor had its initial public offering (IPO) in 2012, and as of July 31, 2023, its annual recurring revenue is $3.9 billion with 16% year-over-year growth.

Steele noted the company has made significant progress since the beginning of fiscal year 2023. However, “the overall market has retracted and we expect the macro environment will continue to be unpredictable for the foreseeable future.”

“As we look ahead, it is important that we continue to evolve our organizational design to empower Splunkers worldwide to deliver results efficiently and more sustainably, all the while improving our ability to navigate ongoing market uncertainty,” he wrote.

Splunk’s workforce reduction news comes on the heels of the acquisition announcement by Cisco, set to be the largest in the company’s history. The deal, valued at approximately $28 billion, is expected to close by the end of the third quarter of the calendar year 2024, pending regulatory approval and customary closing conditions.

With the impending merger, questions regarding product overlap have arisen. Cisco’s Chairman and CEO Chuck Robbins addressed these concerns in a recent conference call with analysts after the takeover announcement, highlighting the synergies between the two companies, especially in observability progress.

“I don’t think we have significant overlap. If you think about the data platform and the observability progress that they’ve made, and you couple that with our application visibility, you couple that with ThousandEyes visibility — the visibility out of the network, we’ll have to make a decision on the platform, but I think that’s clearly going to be the scale that Splunk has,” he said.

Gartner VP Analyst Gregg Siegfried agreed that while there are redundancies, they are not extensive on the security side, and those on the monitoring and observability side are more complementary than overlapping to a degree.