Cognizant will lose $50 to $70 million on ransomware attack

Cognizant will lose $50 to $70 million as a direct result of a recent ransomware attack, the outfit revealed in its first quarter earnings call.

For those who came in late, the firm said it had been targeted by a “Maze” ransomware attack on 18 April, which effectively shut down its internal systems and causing service disruption for many of its customers.

Cognizant said it responded to the attack quickly but still expects its second quarterly earnings to take a notable hit due to the resulting downtime and the temporary suspension of customer accounts.

Cognizant CFO Karen McLoughlin said: “While we anticipate that the revenue impact related to this issue will be largely resolved by the middle of the quarter, we do anticipate the revenue and corresponding margin impact to be in the range of $50 million to $70 million for the quarter.

Maze software steals business’ data and stores it on an external server, allowing them to demand payment for its safe recovery with a threat of releasing the information if it is not received.

Cognizant said the hackers targeted select system-supporting employees as they were working from home, as well as the provisioning of laptops being used to support work-from-home capabilities during the COVID-19 pandemic.

The provider’s CEO, Brian Humphries, explained that the ransomware attack only affected its internal network and customer systems were not impacted.

“First, the attack encrypted some of our internal systems, effectively defaming them and we proactively took other systems offline”, Humphries said.

“Some clients opted to suspend our access to their networks. Billing was therefore impacted for a period of time, yet the cost of staffing these projects remained on our books.”

Cognizant said it reacted swiftly to the attack, mobilising its entire leadership team, deploying the expertise of its security teams, as well as contacting leading cyber security experts.