Splunk Board Faces Investor Suit Over Layoffs, Cost-Cutting (1)

An investor sued Splunk Inc.'s current and former senior leaders, blaming them for potential securities fraud liability stemming from an alleged scheme to hide the software company’s widespread layoffs while falsely hyping its future financial prospects.

The shareholder derivative lawsuit targets Splunk’s ex-CEO, its former chief financial officer, and five board members. It accuses them of projecting major growth in 2021 and 2022 tied to increasing revenue, “not cutting operational expenses,” despite knowing the company was already slashing sales staff.

Company leaders “went so far as to claim that the Covid-19 pandemic did not disrupt hiring,” but Splunk had already ...