Imagine logging on one morning, ready to tackle your tasks for a thriving US-based tech client, only to find their website vanished, replaced by a competitor’s welcome message. That’s the harsh reality facing employees and contractors following the abrupt closure of Skybox Security, a once-promising cybersecurity firm headquartered in San Jose, California, with additional operations in Israel and APAC.
The Israeli-US cybersecurity company has laid off all its employees and ceased operations. This affects about 100 staff in Israel and another 200 in the United States. The company has not paid its Israel-based employees their February salaries, with debts to them amounting to approximately NIS 10 million ($2.78M), CTech reported.
The news comes just as Donald Trump’s Pentagon chief has ordered a halt to work to counter cyber threats from Russia, it has been reported. Pete Hegseth’s instructions, according to a Telegraph report, are part of a larger re-evaluation of all operations against Moscow, US officials said.
Katie Arrington, the former chief information security officer for the department’s acquisition and sustainment organisation during the first Trump administration, has been named the new deputy chief information officer for cybersecurity and chief information security officer at the Department of Defense. Arrington confirmed the new role on LinkedIn.
Liquidation proceedings
Liquidation proceedings are being handled by attorneys Pinni Yaniv and Shahar Kedem of the Meitar law firm. According to the law firm’s website, Yaniv has been involved in many of the largest bankruptcy and reorganisation cases in Israel.
Israel employees were reportedly informed that their final salary would not be paid and were advised to contact the National Insurance Institute. CTech/Calcalist reported the company is entering the final phase of its existence and is shutting down. CEO Mordecai (Mo) Rosen said in a statement to staff: “Liquidation is the final step in closing a company. It involves ceasing operations, selling assets, and using the proceeds to pay creditors, including employees.”
Skybox has Ceased Operations
On February 24, 2025, Skybox made the difficult decision to cease operations after ongoing financial challenges left us with no viable path forward.
For customers impacted by this situation, we have entered into an exclusive transition agreement with Tufin, whose strong financial standing and market-leading products will provide a solid path forward for your security policy program.
We appreciate your support over the years, and we wish you the best.
Former Skybox CEO and employees offer support
The company, which boasted major clients and substantial funding, has left a trail of unanswered questions and, most importantly for any contractors working for the company, unpaid invoices.
The company was founded by Gidi Cohen, who served as CEO from its inception until about two years ago, when Mordecai Rosen replaced him. Cohen, like many ex-Skybox employees, is shocked at the news of the company’s financial distress.
Cohen said of Skybox’s recent fate in a LinkedIn post, “This abrupt end was surprising to me and to many others, and being disconnected, I cannot offer any meaningful explanation. You will need to find it elsewhere.”
Cohen, who is based in California and now CEO & Co-founder of Bonfy.AI, said in a LinkedIn post: “To Skybox employees who were directly affected – please don’t hesitate to DM me, for any reason or no reason. It will be my honor to keep in touch and remain helpful.
Bonfy.AI is hiring, and Paula Ewanich, Skybox’s Chief People Officer has been reposting Bonfy job alerts on LinkedIn. She has also been reposting former SkyBox employees’ LinkedIn posts calling for job opportunities.
Francesco Mancini, a former Skybox employee, had this to say in response to Cohen’s post:
“I’m still in shock and deeply saddened for all my ex-colleagues, many of whom are still trying to understand what happened and what to do next,” said the CyberBit Regional Director.
Mancini continued, “Being part of this community felt like being part of a family. I was proud and happy to represent such an incredible solution, sharing its value with partners and customers…I left because I no longer saw a future after you left… but I never imagined witnessing the company shutting down like this. Seeing the solidarity across the community is inspiring, and I’ll gladly do my part to support these amazing professionals.”
“I was a contractor for Skybox and will likely not get paid now for the last two months of work I did for them. The entire finance team was laid off. Does anyone have any idea of who I could reach out to at Tufin to get paid?”
-Anonynous contractor
What has Tufin acquired?
The San Jose company only announced back in 2023 that former Digital Guardian CEO Mordecai (Mo) Rosen would take the reins at Skybox and manage the company through a new financing round that would bring their total funds raised to $335 million. Investors in that $50 million round included CVC Growth Funds, Pantheon, and J.P. Morgan, it was reported.
Fast forward to 2025, and the company has ceased trading.
“On February 24, 2025, Skybox made the difficult decision to close its operations effective immediately,” according to Ray Brancato, CEO of Tufin.
“For those impacted by this event, we understand this is an uncertain time, and we want to assure you that Tufin is here to help plot your path forward. As the leader in Network Security Policy Management, we are committed to providing a smooth transition for Skybox customers, ensuring you have the tools, expertise, and guidance to continue securing your networks without disruption.
“Tufin is the most financially stable company in our industry—we are profitable, growing, and well-positioned for the future. We know that Skybox customers have been impacted by their sudden closure, and we want to reassure you that Tufin is here for the long run. Read more about Tufin’s financial stability and growth story here.
“To help you move forward quickly and confidently, we have created Tufin ExpressPath for Skybox Customers, a dedicated program designed to support you every step of the way and ease this transition as much as possible.”
Tufin has reportedly bought specific intellectual property, trademarks and customer lists from Skybox but not the company’s customer contracts, Brancato said, meaning all former Skybox customers were left without an active service agreement once the company ceased operations. As a result, former Skybox customers will need to proactively choose Tufin rather than being automatically transferred.
Tufin looking to hire ex-Skybox employees
While the acquisition didn’t include Skybox’s workforce, Brancato said Tufin has a strong interest in hiring ex-Skybox employees in technical, support and R&D roles to help facilitate customer transitions, according to a report by Bank Info Security. In a statement on the web page Tufin CEO Ray Brancato welcomed ex-Skybox customers and wrote that his company had “engaged” some former Skybox workers to aid in the transition.
We definitely are working with experienced resources from Skybox. We’re working through that now to see if we can hire as many people as possible to support a smoother transition to Tufin’s Orchestration Suite.
–Tufin CEO Ray Brancato
The report stated that the hiring process remains “fluid”, with decisions being made based on Tufin’s internal needs and how former Skybox employees can contribute to the transition effort and ensure continuity.
“We definitely are working with experienced resources from Skybox,” Brancato said. “We’re working through that now to see if we can hire as many people as possible to support a smoother transition to Tufin’s Orchestration Suite.”
Contractor risk exposure
The sudden demise of Skybox Security serves as a stark reminder of the vulnerabilities faced by contractors and freelancers working with international companies. While the allure of high-profile projects and lucrative contracts is strong, the potential for unexpected closures leaves many exposed. For contractors and freelancers who may have worked with Skybox, the immediate concern is securing financial compensation for services rendered.
On Reddit, one contractor expressed their concerns: “I was a contractor for Skybox and will likely not get paid now for the last two months of work I did for them. The entire finance team was laid off. Does anyone have any idea of who I could reach out to at Tufin to get paid?”
So, what can contractors do if their client goes bust?
First and foremost, document everything. This includes:
- Contracts: Any written agreements outlining your scope of work, payment terms, and timelines.
- Invoices: Copies of all invoices sent to Skybox Security, including dates and amounts.
- Communication: Emails, messages, or any other form of communication related to your work and payment.
- Work product: Any deliverables or proof of work completed.
This documentation is crucial for establishing your claim for unpaid earnings when filing as a creditor to the Bankruptcy Court.
Your rights and recourse
While international legal complexities can be daunting, UK contractors and freelancers have rights.
- Breach of contract: If you had a valid contract with Skybox Security, their closure and failure to pay constitutes a breach of contract. You may be able to pursue legal action to recover your losses.
- Insolvency proceedings: If Skybox Security enters insolvency or bankruptcy proceedings in the US, you can file a claim as a creditor. This process can be complex, and it’s advisable to get in touch with the client’s HR department or the firm handling the liquidation. This usually entails a questionnaire that you must fill in, outlining what you are owed, along with documentation backing up your claim.
Filling Out and Filing a Proof of Claim in California
The following video is for information purposes only and not legal advice.
California’s Worker Protections (and their relevance):
It’s important to understand that California, where Skybox was headquartered, has specific laws protecting workers, including some freelancers. While the direct application to UK freelancers might be limited, it can provide context.
- California Labor Code: California has robust labour laws, including those related to timely payment of wages. Even for independent contractors, there are frameworks designed to prevent unfair practices.
- AB5/ AB 2257 and Independent Contractor Status: California’s AB5 law, while complex, aimed to clarify independent contractor status. If you were misclassified as an independent contractor when you should have been an employee, you might have additional rights. However, this is largely for people who live in California.
- Fractional workers’ rights: Fractional workers in California have the right to be paid for all work performed. They have the right to have a clear contract stating the terms of their work and their pay, which is usually set as a retainer.
What UK Contractors should do if a client goes bust
Seek legal advice: Consult with a legal professional specialising in international contracts and debt recovery. They can assess your specific situation and advise on the best course of action. When it comes to UK clients/companies filing for insolvency or bankruptcy, contractors can file as creditors by filling out this form.
Consider credit insurance: For future projects with international clients, explore credit insurance options to protect against unpaid invoices. Make sure you check your professional indemnity insurance. Many exclude the US and Canada.
Due diligence: Before engaging with any new client, conduct thorough due diligence, including researching their financial stability and reputation on public documents, freelancer community sites and discussion groups on sites such as Reddit. Also, search for background on business sites that track company news and financings, such as Crunchbase.
Lessons learned
The sudden collapse of Skybox Security highlights the importance of proactive measures and a clear understanding of your rights when working with international clients. While such a situation may seem unlikely, if it were to happen to you, it could be overwhelming. That is why it makes sense to seek professional guidance before you become engaged with an international client. That way, if you end up in such a scenario, you can significantly improve your chances of recovering your financial losses.
DISCLAIMER
This article is for information purposes only and does not constitute legal advice.
