Kape Technologies is one of the biggest names in the VPN sector. It is the parent company of some of the biggest premium VPNs around and, in recent years, has been prolific in buying out new businesses to expand its ever-growing stable.
But, it seems that all is not well at Kape Towers as the company has just laid off a large number of staff.
Precise numbers are unclear at this stage. One senior staff member who is leaving, Dan Gericke, the Chief Technology Officer of ExpressVPN, has estimated that as many as 30% of Kape Technologies global workforce could have been laid off.
Who are Kape Technologies and what is going on there?
You may not be familiar with the name Kape Technologies as they are a parent company of a number of VPNs and VPN comparison sites but don’t actually lend their name to any of the services themselves.
There was not a formal announcement of job cuts at Kape Technologies, but it has been noticeable on LinkedIn that a significant number of Kape employees have been handed their leaving cards.
Last month, Peter Burchhardt, one of the co-founders of ExpressVPN, announced out of the blue that he was leaving Kape Technologies. While he described his decision as a retirement, it nonetheless raised more than a few eyebrows that he was bowing out when he did.
Then, on Friday 28th July, Dan Gericke, the Chief Technology Officer of ExpressVPN, also posted on Twitter that he was leaving Kape Technologies.
Gericke said in his LinkedIn post that Kape Technologies had “decided to retrench a portion of their global workforce. I decided to exit along with my many amazing colleagues that were terminated.”
He went no further into the details of what was going on but made it very clear that he was not best pleased and that, as well as helping colleagues with references, he was also now available for work himself.
It is not just the head honchos who are leaving Kape Technologies in numbers. There are plenty of clearly disgruntled staff posting on LinkedIn.
What has Kape said officially about the job losses?
After being hassled by the tech media for a number of days, Kape has finally issued a statement describing the job cuts as a “restructure” of the business.
They explained that “To ensure we are set up in the long term to continue providing our customers with the best protection in the industry, we recently conducted an organisational restructuring.”
“Following a careful evaluation, this included the difficult decision to implement a reduction in force, resulting in approximately 180 employees, around 12% of our workforce, being made redundant across the business.”
They went on to state that “we want to emphasise that this outcome is in no way a reflection of current business performance but is to prepare ourselves to grow faster in the coming months and years.”
“By proactively addressing these challenges now, we can lay the foundation for a leaner and more resilient organisation and be better equipped to seize new opportunities in the cybersecurity space.”
What does “restructure” really mean?
It’s the typical sort of vague, non-statement laced with corporate jargon that tends to cause a red flag in sectoral observers.
There is already speculation that Kape Technologies could be planning to cut back on its VPN services or that there may even be plans to merge some of the different VPNs it has in its stable, perhaps into a single super-VPN.
This is pure speculation at the moment, and we would urge users of ExpressVPN, CyberGhost VPN, and Private Internet Access not to be too concerned at this stage.
However, if you take a look at the recent corporate history of Kape Technologies, it is not unreasonable to think that something significant may be afoot.
Kape Technologies was a public company when it purchased the likes of ExpressVPN and, as a result of this, many staff will have got share options when the purchase went through in 2021.
However, in May of this year, Kape Technologies went private when Teddy Sagi, an Israeli billionaire, acquired 100% of the business through a company called Unikmind Holdings.
Such purchases are rarely undertaken for reasons other than profit, and “restructuring” is a common term used for cost-cutting measures implemented to maximise profits in a business. It is a strategy that will be familiar to anyone who has been following Elon Musk’s takeover of Twitter.
There has been some speculation (and we stress this is unverified speculation) that someone has already paid themselves a sizable bonus from the Kape Technologies coffers. This may or may not be true, but regardless of whether it is, the restructuring points towards a profit retaining exercise.
The situation at Kape Technologies is still fluid, and we are not planning to jump to any conclusions.
But we will be keeping a close eye on developments and also watching closely to ensure that the high standards that ExpressVPN, CyberGhost VPN, and Private Internet Access have set remain in the weeks and months ahead.
If any users do experience any problems or issues with these VPN providers, do let us know. Equally, if you have any insight into the situation at Kape Technologies, we’d love to hear from you too.
For other readers, rest assured, as soon as there is something that you need to know, you will read it here first.