Top 5 ways layoffs increase cybersecurity risks

Layoffs and cyber security
Layoffs and cyber risk

Top 5 ways layoffs increase cybersecurity risks

The first quarter of 2023 landed with a thud as Amazon, Meta, Twitter, and other major U.S. companies announced layoffs caused by fears of recession, high inflation, and interest rate hikes. The current IT environment is fraught with heightened vulnerability and novel security threats, and when organizations quickly reduce staff, it can cause significant repercussions to a company's cybersecurity posture. 

Here are the top five security risks caused by layoffs.

1. Untrained employees

In a layoff, tasks disappear or are delegated to others. Training a new person could delay critical IT services. Or, that person may inadvertently jeopardize systems and data, resulting in security vulnerabilities. Untrained users can wreak havoc on your business by causing errors, creating bottlenecks, or even perpetrating fraud.

2. Insider threats


Organizations going through a layoff are incredibly susceptible to insider threats. Each year insider threats account for the loss of mission-critical data, downtime, lost productivity, and reputational damage. A report by Cybersecurity Insiders found that 66% of organizations feel moderately to extremely vulnerable to insider threats. Of the respondents, only 2% say they are not at all vulnerable to an insider attack. Insider threat risk isn’t just the act of taking money. It also includes stealing sensitive data, sabotaging critical systems, and creating accounts that can change transactions or cause reputational harm. Strong internal controls are crucial to prevent and detect the risk of insider threats.

3. Orphaned accounts

Misuse of user identity and access is the root cause of most cybersecurity incidents. In the chaos of a layoff, accounts may be forgotten and stay open with access permissions even though the user has departed the company and the account is no longer needed. These accounts are orphaned and no longer have a valid business owner. It doesn't take much effort for a malicious actor to find orphan accounts to target and use to gain access to your company because these accounts are not actively monitored. 

4. Asynchronous identity data across systems

A modern digital infrastructure framework consists of various access management systems: user access management, identity management, privileged access management, and so on. When the identity data in those systems become out of sync, it can cause enormous security risks and inefficiencies. For example, when layoffs happen, you may terminate an employee in HCM, which could trigger the departed employee to lose access to payroll and not receive payment. When business was conducted offline, this was not such a big deal. Now that everything is on a digital platform, the timing, sequencing, and orchestration of termination across systems are crucial, especially during layoffs when employees are disgruntled and the likelihood of fraud increases.

5. Increased Segregation of Duties conflict

Employees who remain during a layoff must take on additional responsibilities and access to data and systems to fulfill those responsibilities. But new access may not be appropriately verified to ensure no segregation of duties conflicts with the increased access to systems.

How to stop cybersecurity risks during a layoff

In today's uncertain business environments, the automation of access governance ensures continuous compliance with company policies for cybersecurity, data privacy, and segregation of duties. Access governance can help organizations effectively address risks caused by layoffs: while:

Decreasing risk and strengthening security: Compromised identities are a growing threat, and their likelihood increases exponentially during a layoff, and mass deprovisiong of user accounts is required. Centralized visibility of user identities and access privileges creates a single source of truth when determining "who has access to what," allowing management to promptly detect inappropriate access, policy violations, or weak controls that put the business at risk. Access governance solutions enable IT to identify risky user populations, policy violations, and inappropriate access privileges and to remediate these risk factors.

Efficiently and securely provisioning and de-provisioning user access: By giving your users timely access to the resources they need to take on the additional responsibilities after a layoff, identity governance, and administration enable them to become productive more quickly – and to stay productive, no matter how much or how fast their roles and responsibilities change. It also allows users to request access reducing the workload on the help desk and IT operations teams. And with automated policy enforcement, access governance will enable you to meet service-level requirements without compromising security or compliance.

Reducing operational costs: Identity and access governance automates labor-intensive processes like access certifications, access requests, and provisioning, dramatically reducing operating costs. This is particularly crucial, especially when fast onboarding and offboarding are critical to increasing operational efficiency during layoffs. Automating these processes can significantly reduce the time IT staff spends on administrative tasks and delegate users to request access, manage passwords, and review access independently. And with access to dashboards and analytics tools, leadership can have the data and metrics to strengthen internal controls and reduce risk. 

Collaboration between cyber and IT security teams creates a unified strategy to combat risks associated with layoffs. Cooperation and communication during layoffs ensure collective monitoring of risk and information sharing across security teams, ultimately assisting in promptly and consistently communicating threats and risks. The ability to act collaboratively and cross-functionally during a layoff is crucial to navigating changes effectively.

Want to learn more about how SafePaaS can protect your business during layoffs?

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