Israeli Tech Firm Alarom Cuts One-Third of Staff Amid FBI Probe and Stock Collapse

Alarom, an Israeli technology company specializing in internet access and data collection solutions, has laid off about 30 employees, roughly one-third of its workforce, following an FBI investigation and a sharp decline in its stock value. The layoffs were preceded by hearings for the affected workers, with 10 employees placed on unpaid leave. As of late 2025, Alarom employed around 100 people, including contractors and consultants, mostly in Israel, divided evenly between sales and development/support divisions.

The company, led by CEO Shahar Daniel and lacking a controlling shareholder, experienced significant growth in 2025, nearly doubling its staff to expand its business. Alarom operates a network of Residential Proxies, IP addresses that appear as regular home users to websites, used by clients for data gathering, price monitoring, market research, AI training, and advertising oversight.

The FBI investigation centers on Alarom's subsidiary, NetNut, suspected of connecting customers' home computers to its proxy network without consent. This inquiry, along with domain seizures by U.S. authorities, caused Alarom's stock to plummet from a market value of about 1 billion shekels in 2024 to approximately 50 million shekels. Security sources allege a link between NetNut and software called "Popa," used for device takeover, claims the company denies, affirming full cooperation with law enforcement.

In response, Alarom temporarily suspended data traffic on affected services to assess its infrastructure, a move expected to significantly impact its financial results and service delivery capabilities. This suspension also reduced the company's workforce needs, prompting the recent layoffs.