Salto, an Israeli software company, has announced layoffs affecting 30 employees, primarily based overseas.

This reduction accounts for about half of the company’s workforce and is part of a restructuring strategy.

Salto, founded by Rami Tamir, Benny Schnaider, and Gil Hoffer, said the reorganization is part of a shift toward cybersecurity.

The company plans to develop a new product under a different brand while continuing to support its existing offerings.

Salto has raised around US$70 million to date, with investments from firms such as Accel, Salesforce Ventures, Lightspeed Venture Partners, and Bessemer Venture Partners.

The company aimed to simplify application configuration processes by offering a standardized textual representation of extracted data.

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🔗 Source: Calcalist

🧠 Food for thought

1️⃣ Salto’s pivot to cybersecurity follows investment trends but faces fierce competition

Salto’s shift to cybersecurity represents a strategic alignment with current market momentum, as cybersecurity attracted significant venture capital in early 2025 and ranked fourth among top concerns for investors 1.

Their timing coincides with a projected growth in cybersecurity budgets, with Gartner reporting that 80% of CIOs plan to increase their cybersecurity spending 2.

However, Salto enters a crowded field where specific cybersecurity segments like zero-trust architecture, AI-enhanced security, and supply chain security are already gaining significant traction 3.

The company faces the challenge of differentiating its offering in a market that saw a 17% increase in disclosed vulnerabilities last year, exceeding 30,000 total vulnerabilities that companies must address 2.

With their $70 million in total funding, Salto will be competing against well-established security vendors and startups alike, many of which have been purpose-built for security rather than pivoting from other domains.

2️⃣ Large-scale layoffs often undermine expected financial benefits

Salto’s decision to lay off 50% of its workforce aligns with common corporate restructuring practices but risks significant hidden costs beyond the immediate payroll savings.

Research shows that companies conducting deep layoffs typically underperform the market by 8% over three years, contradicting the expected financial benefits 4.

The remaining employees at Salto may experience decreased morale and productivity, potentially leading to a 31% increase in voluntary turnover among the staff who weren’t laid off 45.

Historical data indicates that mass layoffs often result in loss of institutional knowledge and expertise that proves difficult to replace when growth resumes 6.

Companies frequently underestimate the long-term costs of layoffs, including reduced innovation capacity, weakened customer relationships, and the eventual expenses of rehiring and training when market conditions improve 7.

3️⃣ Pivot strategy reflects broader shift toward sustainable business models

Salto’s strategic shift mirrors a larger trend in the investment landscape, where venture capitalists are increasingly prioritizing profitability and sustainable growth over rapid expansion at all costs 8.

The cybersecurity market offers more immediate revenue opportunities than Salto’s original product focus, with organizations worldwide facing urgent security challenges that demand immediate solutions 29.

This pivot demonstrates how companies with significant funding ($70 million in Salto’s case) are under pressure to find viable business models that can generate returns for investors like Accel and Salesforce Ventures.

The company’s approach of maintaining its existing product while developing a new offering allows it to preserve current revenue streams while targeting the cybersecurity sector, which captured a significant portion of the $126.3 billion in global venture capital invested in Q1 2025 10.

This dual-track strategy reflects the increasing emphasis on financial discipline in the current investment climate, where companies must balance innovation with clear paths to profitability 8.

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