Cognizant set to lose up to $70m due to ransomware attack

Cognizant looks set to lose around $50 to $70 million as a direct result of a recent ransomware attack, the IT services provider revealed in its Q1 earnings call.

Last month, 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.

As reported by ZDNet, 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.

"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," said Cognizant CFO Karen McLoughlin in the earnings call.

Maze software is typically used by hackers to steal a business' data and store 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.

"Nobody wants to be dealt with a ransomware attack," Humphries added. "I personally don't believe anybody is truly impervious to it, but the difference is how you manage it. And we tried to manage it professionally and maturely."