31% of US companies close down after falling victim to ransomware
Data presented by the Atlas VPN research team reveals that 31% of businesses in the US are forced to close down as a consequence of falling victim to ransomware attacks.
The vast majority of firms have experienced substantial business impact due to ransomware attacks, including revenue loss and brand harm, unforeseen personnel cutbacks, and even the shutdown of the business altogether, according to key findings in this new report.
The data is provided by Cybereason, a cybersecurity company that focuses on ransomware prevention. They surveyed 1,263 cybersecurity professionals in April of 2021. The participants were from the United States (24%), United Kingdom (24%), Spain (12%), Germany(12%), France (12%), United Arab Emirates (8%), and Singapore (8%).
There are a variety of business sizes represented. Organizations with 500 or more employees (30%) are the most common, but they also received replies from companies with 250-500 employees (23%), 100-249 employees (25%), 50-99 employees (11%), 10-49 employees (10%), and fewer than 10 people (1%).
Shockingly, as many as 42% of organizations in the United Arab Emirates were forced to close down after a ransomware intrusion.
Following them is the United Kingdom, where 34% of surveyed professionals stated that their company halted their activities due to damages from the ransomware attack.
The United States is in third place, as 31% of companies attacked reported closure after the incident.
Businesses in France (22%), Germany (21%), and Singapore (21%) saw similar closure rates. Finally, only 5% of organizations in Spain had to shut down because of an attack.
Worth noting is the fact that the majority of firms that paid ransom demands in the past were not immune to later ransomware intrusions, which were generally carried out by the same threat actors.
Also, even having cyber insurance does not guarantee that a company will be able to recover all of the costs incurred as a result of a ransomware attack. Moreover, damages like reputational loss are not covered by cyber insurance but still significantly impact businesses.
If you want to find out more about the current cybercrime landscape, feel free to check out our Cybercrime Statistics report.
Employee and staff layoffs
Even though the majority of ransomware attacks do not result in business closure, a significant portion of companies are forced to eliminate some jobs. Interestingly, layoffs strongly depend on the industry.
For example, 50% of enterprises in the legal sector lay off employees after a ransomware attack. A close second is the retail industry, where 48% of ransomware victims had to let go of some workers.
The automotive industry is also one of the most affected, with 42% of organizations reporting layoffs. The fourth-place goes to the manufacturing and technology sectors, where nearly a third (29%) of ransomware victims were forced to let go of a portion of their employees.
Organizations in the healthcare industry are also not immune to layoffs, as 24% of them had to cut back on their workers. Close to them is the financial sector, where 23% of enterprises suffered layoffs after an attack.
Quite unexpectedly, respondents that work in the government sector never encountered a situation where a person or a group of employees was fired because of a ransomware attack.
All in all, the findings are shocking and a huge cause for concern. Most workers are not aware of the fact that one attack could mean not only layoffs but a total demise of the organization.
As always, preventative measures are the best when it comes to taking care of ransomware attacks. Initiatives such as employee training, mandatory OS and software updates, and phishing scam simulations are of the utmost importance to keep your business safe and secure.