Indirect Losses Resulting from a Cyberattack

The losses caused by network attacks directly or indirectly affect enterprises. In this article, we focus on indirect losses caused by a cyberattack. These indirect losses are often hard to quantify and hidden from the public eye, but the impact on businesses is still significant. We will look at five types of indirect losses caused by a cyberattack in the following.

Productivity Loss

Productivity losses are primarily losses caused by a company’s inability to deliver its products or services. Among them, the productivity loss of employees is particularly obvious. Employee productivity loss refers to the loss of work/income/production due to an employee being unable to work for any reason. For example, if the company’s equipment becomes unusable due to a cyberattack, it will result in a certain number of employees not completing their work on time. Furthermore, if this equipment is the company’s leading equipment, to produce a specific product, it will cause the end-product to be unable to be delivered. This will cause the company to lose the revenue generated by a customer’s order.

In addition, in 2021, Colonial Pipeline suspended operations of a pipeline that could not transport about 2.5 million barrels of fuel per day to the East Coast of the United States after a ransomware attack by hackers hit it. This loss of productivity through cyberattacks on company availability and integrity was significant.

Indirect financial loss

An incident response plan is an essential measure for enterprises to minimize the damage caused by network attacks and speed up recovery. This also means that when implementing the network incident response plan, the organization must face the loss caused by the response. For example, after a cybersecurity incident occurs in the organization, various departments will start to hold meetings in order to bring a resolution. The cost of staff time spent performing these meetings is the response cost to the business. The organization may also pay additional response fees when the incident is resolved, depending on the type of cybersecurity incident and the results of an external investigation.

Job loss

Cyber attacks can also lead to layoffs. For example, when a company has a data breach, everyone from the average executive to the average employee who was the cause for exposing customer data could lose their job. Data breaches can seriously affect the careers of the employees involved.

If an organization suffers from a ransomware attack, it will likely face a substantial financial crisis, if it is a prolonged attack or the attack remains unresolved for a long period of time, leading to temporary layoffs. One example is the temporary layoff of all employees in the steel division due to a cyberattack on the Evrza Steel Plant in Saskatchewan, Canada, on March 5, 2020. Another example is in health care. A medical clinic in the US state of California has shut down and stopped operations after a ransomware attack. This made doctors unable to continue working, and it eventually led to a large number of patients switching doctors, as their medical records were inaccessible and/or deleted.

IP theft

Intellectual property includes a wide range of corporate capital, including but not limited to patents, designs, customer information, business plans, copyrights, trademarks, and trade secrets. Intellectual property theft refers to the loss of intangible costs associated with these exclusive business critical assets, resulting in irreparable economic losses, due to the loss of competitive advantage of a business or its products, the loss of customers, and the long-term investment in intellectual property.

Intellectual property theft is likely to come from inside the company. These insiders often have authorized access, making it easy for them to steal intellectual property before leaving. They steal them, most likely to take them to a new job or start their own company. In addition, cyber threats from external attackers pose a significant existential threat to the company’s intellectual property. If a cyber attacker steals and reveals a company’s core technology secrets, the consequences are often unbearable.

Reputational damage

Reputational damage is the loss of financial capital, social capital, or market share due to damage to a company’s reputation. After a major data leakage event occurs, the company will not only suffer significant financial losses to pay regulatory fines but also suffer losses of its reputation and brand, which may affect its stock value and its ability to retain customers. The impact of a cyberattack on stock price is noticeable. When the news of the breach is spread, the stock price will drop significantly in the following time, according to the impact. And it can lose a lot of customers, such as the cyber attack on Talk Talk, a British telecoms firm, which cost them more than 100,000 customers, that is a third of its value.


Never underestimate the cost of a cyber attack. Cyber attacks can affect any organization and cause losses in many ways. It is crucial for enterprises to take proactive measures to manage cybersecurity risks and develop risk management plans. At 3WaySecure Consulting, we offer services in the areas of risk management, security testing, assessments and audits, and cybersecurity consulting that are tailored to your specific infrastructure and business needs. If you require assistance regarding the cybersecurity challenges your business faces, please contact us for more information or to get non-binding advice from our experts.

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