Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 4, 2023

SecureWorks Corp.

(Exact name of registrant as specified in its charter)

Delaware

001-37748

27-0463349

(State or other jurisdiction of incorporation)

(Commission File Number)

(I.R.S. Employer Identification No.)

One Concourse Parkway NE

Suite 500

Atlanta,

Georgia

30328

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (404) 327-6339

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐						Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐						Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐						Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐						Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock,	SCWX	The Nasdaq Stock Market LLC
par value $0.01 per share		(Nasdaq Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).


Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.05 Costs Associated with Exit or Disposal Activities.

On August 4, 2023, SecureWorks Corp. (the “Company”) committed to, and on August 14, 2023 announced to employees, a plan to reduce the Company's workforce by approximately 15% and to implement certain real estate‑related cost optimization actions (the “Plan”). Under the Plan, the Company intends to rebalance investments cross-functionally in alignment with the Company’s current strategy and growth opportunities, such as focusing on the higher value, higher margin Taegis solutions, optimizing the Company’s organizational structure to increase its scalability, and other priorities, to better position the Company for continued growth with improving operating margins over time.

In connection with the Plan, the Company currently estimates that it will incur expenses up to approximately $14.2 million, the substantial majority of which are expected to result in future cash expenditures. These expenses are anticipated to consist primarily of severance and other termination benefits, as well as real estate-related expenses. The Company expects to recognize these anticipated expenses during the second quarter of fiscal year 2024 and to substantially complete the Plan during the third quarter of fiscal year 2024, although the timing of workforce reductions may vary by country based on local requirements.

Cautionary Statement Regarding Forward Looking Statements

This current report, including the exhibit furnished herewith, contains forward-looking statements, including, but not limited to, statements regarding the date of completion of, and expenses that may be incurred in connection with, the Company’s reorganization plan. The expectations, whether expressed or implied in these forward-looking statements, may not turn out to be correct. All forward-looking statements speak only as of the date hereof and are based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. A further description of the risks and uncertainties relating to the business of the Company is contained in the Company’s reports filed with the SEC, including the Company’s annual report on Form 10-K for the fiscal year ended February 3, 2023, quarterly reports on Form 10-Q, and current reports on Form 8-K. The Company does not undertake to update, and expressly disclaims any duty to update, its forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.

Item 7.01 Regulation FD Disclosure.

On August 14, 2023, the Company sent a communication to its employees regarding the Plan. That communication is furnished herewith as Exhibit 99.1.

In accordance with General Instruction B.2 to Form 8-K, the information contained in this Item 7.01, including Exhibit 99.1 hereto, is being “furnished” with the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under such section. Furthermore, such information shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, unless specifically identified as being incorporated therein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following documents are filed or furnished herewith, as applicable, as exhibits to this report:


Exhibit No.						Exhibit Description

99.1						Communication to Company Employees, dated August 14, 2023
104						Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document, which is contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


Date:	August 14, 2023	SecureWorks Corp.

		By:	/s/ Alpana Wegner
			Alpana Wegner
			Chief Financial Officer

From: Secureworks CEO Wendy Thomas

To: Global Secureworks Teammates

Date: August 14, 2023

Title: Organizational Announcement

Team,

We are a SaaS security business, differentiated by the combination of our technology and human intelligence. We work in a market that evolves at a much faster pace than most, and that means we continually adapt and stay agile for better customer outcomes. Today, we are announcing actions to simplify and scale our business and to deliver profitable growth. These actions include restructuring and reducing our workforce by approximately 15%.

It is difficult to say goodbye to many talented teammates who have become friends, and we will do all we can to support their transition. It is also the right and necessary decision for our business. We’ll meet to discuss what this looks like in a Company All-Hands on Thursday, but we’ve provided some context below, followed by how we are informing and supporting teammates leaving Secureworks.

A Simple, Scalable Business

Taegis is growing, making up 86% of our total ARR at the end of Q1. CTP and non-strategic services are sunsetting faster than our initial projection, which helps us to accelerate the end of our transformation due to the tremendous work from the teams supporting those customer transitions. And we are continuing to invest in the growth of our business, aligned to our strategic priorities. With our goal to be near break-even Adjusted EBITDA in Q4, we are rightsizing our organizational structure beyond the direct impact to teams supporting CTP.

Our priority, always, is to adapt for our customers and the needs of their business, while we grow our business to secure human progress for years to come. Successful businesses are flexible in the way they deploy resources where they’re needed most, foster innovation, and make real impact. We are simplifying our team structure with fewer organizational layers – and meaningful process and technology changes – to empower teammates to be bold, challenge the status quo, and make impactful decisions. The changes we’re making and the execution ahead will set our business up for long-term success.

For Departing Teammates

First and foremost, to those leaving, thank you for your service, expertise, and support of our mission. Your contributions have made an indelible mark on both the customers we serve and our team.

The notification process will vary as we comply with local laws and practices. We have outlined below what to expect depending on your location.

In the US and UK

Within the next hour, teammates leaving Secureworks will receive a calendar invite to speak individually with a leader in their department and an HR business partner. In that meeting, we will provide the details of benefit packages and ongoing support to help with transitions. We have scheduled these meetings to take place by Wednesday of this week. Our goal is to give teammates as much clarity as possible, as soon as possible.

In Japan, India, Australia, and Romania

Due to local requirements and time zone considerations, we have informed impacted teammates located in these regions last week and earlier today.

In the Middle East and Select European Countries

Due to country-specific regulatory requirements, notifications will take place at various times between now and mid-September. We will work closely with people managers and teammates to provide notice when able.

What’s Next

Our priority is to support teammates during this transition period, and we are reserving the next several days to host 1x1 meetings for teammates preparing to leave. The final working day will vary by role and country, but the last day for many will be Friday, August 25. In these next two weeks, your leaders will work closely with everyone on your team and others to identify dependencies, re-examine priorities, and transition core responsibilities before identified departure dates.

For those staying with Secureworks, we’ll start with the All-Hands on Thursday to discuss the path forward and address questions. We will provide a refresh on our strategy and priorities to ensure you’re spending your time and energy on what matters most. Leadership will follow up with their respective teams this week with more details for their organization to support focus areas moving forward.

We have prepared an initial set of Frequently Asked Questions and will continue to communicate and provide opportunities for discussion over the coming weeks. The strength of our team lies not just in our individual skills but in the camaraderie and support we extend to our friends and colleagues. Thank you for the continued care you share with each other.

Wendy

Cover Page	Aug. 04, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 04, 2023
Entity Registrant Name	SecureWorks Corp
Entity Incorporation, State or Country Code	DE
Entity File Number	001-37748
Entity Tax Identification Number	27-0463349
Entity Address, Address Line One	One Concourse Parkway NE
Entity Address, Address Line Two	Suite 500
Entity Address, City or Town	Atlanta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30328
City Area Code	404
Local Phone Number	327-6339
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Stock,
Trading Symbol	SCWX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001468666
Amendment Flag	false