Cognizant says the ransomware attack that disabled its internal systems last month could cost it between US$50 million and US$70 million in the current quarter, with additional expenses to come later in the year.
The cybercriminals, suspected to represent Mage ransomware group, encrypted some of the company’s internal systems, forcing it to put other systems offline.
The attack left its work-at-home arrangement in jeopardy, besides forcing it to put many IT projects on hold. What is more, many of its clients cut off its access to their networks upon hearing the news.
“….Some clients opted to suspend our access to their networks. Billing was therefore impacted for a period of time. Yet, the cost of stopping these projects remained on our books,” explained the company’s CFO Karen McLoughlin during an earnings call recently.
Although Cognizant claims to have restored most of its services, McLoughlin says the Ransomware attack would continue to ‘negatively impact’ its financial results beyond Q2.
The attack came at a time when the company was still struggling to equip its Indian employees to work from home. It was a “perfect storm”, described the company’s CEO, Brian J. Humphries, narrating how the company scrambled to support its staff when the Indian government suddenly announced lockdown measures to stem the spread of coronavirus.
“The ultimate decision to lock down India came with a four-hour notice. So we, like many services companies, were scrambling to fulfill work-from-home capabilities via encrypted desktops or laptops or remote VDI, et cetera.”
Following the attack, many of these employees were thrown offline, forcing the company to halt services to numerous clients. Despite the incident, these employees will work from home ‘on a more permanent basis’, the CEO added.