US cybersecurity firm posts £1m loss for Belfast operation after surge in wage bill
THE Northern Ireland division of US cybersecurity firm Proofpoint lost £1million last year on the back of a significant increase in salary costs, a new report produced by the company has shown.
Proofpoint NI, which operates from Weavers Court in Belfast, recorded a 17 per cent rise in revenue growth to £11.1m in the 12 months to December 31 2018. But surging administrative expenses saw the company swing from a £1.2m pre-tax profit in 2017 to a £1m pre-tax loss last year.
The company said the loss followed ‘an increase of share based compensation’. But Proofpoint NI’s accounts reveal a massive £4m rise in the tech firm’s wage bill during 2018.
The cybersecurity firm increased its Belfast workforce to 125 last year, recruiting an extra 27 people from 2017. Nearly all the new employees were hired as ‘support, operations and engineering’ staff.
The result was a 60 per cent rise in overall staff costs from £7m to £11.4m last year. The total includes social security and pension contributions.
It comes amid the increasingly competitive market for skilled tech workers in the north.
New research from recruitment firm Hays this week said skills shortages here was helping push up salaries. It found the average wage for certain tech jobs, including java developers and data engineers, had increased by as much as 11 per cent in Northern Ireland during the past year.
Proofpoint was one of the first US cybersecurity firms to set up an operation in Belfast.
The company’s services include protection for email attachment-based attacks on businesses.
Proofpoint announced plans to create 94 jobs at a new European centre in the city in a £6m investment during August 2014. Invest NI offered the company £600,000 in economic support.
Last year saw the company expand beyond that original headcount.
But the cybersecurity space in the north has become increasingly crowded.
California-based Contrast Security became the latest US tech firm to branch into Belfast during September, when it announced plans to create 120 jobs. Cybersecurity firm MetaCompliance announced 70 jobs in Derry during the same month.
This week, San Jose anti-fraud tech firm Signifyd said it had already recruited 63 people for its new Belfast base in River House during 2019. It plans to eventually grow to 120 staff.
According to the Department for the Economy, the cybersecurity sector in Northern Ireland now employs around 1,700 people. That compares with virtually zero a decade ago.
The government has set a target of creating 5,000 cyber security professionals in the north by 2030.
But the expanding sector has witnessed a number of recent casualties.
Texas-based cybersecurity firm Alert Logic recently shut its premises at Weavers Court, the same complex where Proofpoint operates.
The company had originally announced plans to recruit 88 people here. As of September, it had just nine remote staff in the north.
Boston-based financial services group State Street also pulled the plug on its Belfast operation during September. The company had reportedly hired more than 40 people on generous salary packages at Glandore House. State Street expectantly moved to close the centre before it had been public announced.