The Effect of Cybersecurity Layoffs on Cybersecurity Recruitment

the-effect-of-cybersecurity-layoffs-on-cybersecurity-recruitment

On Friday, January 20, 2023, Google announced it would lay off 12,000 employees. Amazon and Microsoft have laid off a combined 28,000 people; Twitter has reportedly lost 5,200 people; Meta (Facebook, etcetera) is laying off 11,000… This is just the tech giants, and almost all the staff looking for new positions are, by definition, tech-savvy – and some will be cybersecurity professionals.

Layoffs are not limited to the tech giants. Smaller cybersecurity vendor firms are also affected. OneTrust has laid off 950 staff (25% of employees); Sophos has laid off 450 (10%); Lacework (300, 20%); Cybereason (200, 17%); OwnBackup (170, 17%); OneTrust (950, 25%) and the list goes on.

SecurityWeek examined how this layoff-induced influx of experienced professionals into the job seeker market is affecting or might affect, the skills gap and recruitment in cybersecurity.

The skills gap

The skills gap is a mismatch between the skills available in the workforce, and the skills required by employers. Required skills are continuously evolving with new technology and business transformation. People can learn how to use computers, and many staff currently being laid off will already have done so. But it is far easier to learn how to use computers than it is to learn how computers work. It is in the latter area that the skills gap becomes a talent gap for cybersecurity.

So, the first observation is that current large-scale layoffs may slightly reduce the skills gap at the computer usage level but will likely have little effect on the cybersecurity-specific talent gap where employment requires a knowledge of how computers work. The talent gap is simply too large, and layoffs in these areas are likely to be readily absorbed by new security startups and expanding companies. Many of the companies involved in cybersecurity reductions will almost certainly need to rehire next year or soon after.

Mark Sasson, managing partner and executive recruiter with the Pinpoint Search Group, agrees with this. “Maybe it’s going to be a little easier for organizations to recruit, because you’re getting an influx of experience into the market. However, I don’t think that’s a fix for the talent gap – it’s not going to have a mid to long term discernible impact. There are too few people that have the skills that organizations need today. And so, people are going to get scooped up and we’re still going to have the same situation with the talent gap.”

Cyber threats are still increasing and the demand for cyber defenders is still growing. Criminals are recruiting, not contracting. 

Reducing the talent gap in cybersecurity will more likely depend on changing attitudes with employers than adding numbers from those that have been laid off. You could almost say that the cybersecurity talent gap is a self-inflicted wound: employers want experience plus certifications plus new university degrees – which rarely exists in the real world.

Michael Piacente, managing partner and co-founder at Hitch Partners recruitment firm, takes a similar view. “The internal definition on scope and goals often varies greatly resulting in shifts, time delays, and often rendering the position ‘unfillable’,” he told SecurityWeek. “Perhaps it is time to stop focusing so much on resumes and job descriptions. We see these tools as outdated and too often used as a crutch resulting in bad habits, and inconsistent behavior – and they are horribly unfair for under-experienced or diversity candidates.”

He takes this to the extreme and has never supplied resumes with his candidates. “Instead, we build a storyboard about the candidate created as a result of multiple meetings, interactions, and back channels in order to focus on the candidate’s journey, the human character elements as well as their matching and gaps for the particular role.” In short, the talent gap will more likely be reduced by redefining the gap than by seeking to match unrealistic demands to the existing work pool.

Dave Gerry, CEO of Bugcrowd, has a specific recommendation based on diversity candidates. He believes organizations need to be more open to the diversity pool – including neurodiversity (see Harnessing Neurodiversity Within Cybersecurity Teams). “Organizations,” he said, “need to continue to expand their recruiting pool, account for the bias that can currently exist in cyber-recruiting, and provide in-depth training via apprenticeships, internships and on-the-job training, to help create the next generation of cyber-talent.”

However, even if the influx of laid-off experience will have little overall or lasting effect on the macrocosm of the skills gap, it will almost certainly have an immediate effect on recruitment in the microcosm of the cybersecurity talent gap.

Recruitment in cybersecurity

Cybersecurity is not immune to the current round of staff trimming – and it includes security leaders as well as security engineers. Ultimately, it’s a cost cutting exercise; and organizations can save as much money by cutting one leader’s position as they can by cutting two engineers. “Organizations are asking themselves if they can survive letting one person go but still get the job done with the remaining team,” explains Sasson. “If the answer is yes or even maybe, they’re tending to let go of the more highly paid and highly skilled people because they think maybe they can do more with less.”

That’s a top-down approach to staff reductions, but the same argument is used in a bottom-up approach. Joseph Thomssen is senior cybersecurity recruiter at NinjaJobs (a community-run job platform developed by information security professionals). “A company that is not security focused may feel like they can rely on their senior employees to pick up lower-level responsibilities,” he said, “and this can be detrimental to a security team.”

The overall result is that we now have laid off cybersecurity engineers looking for new employment, and we have employed cybersecurity leaders looking for alternative and safer positions. “Many of these layoffs in cybersecurity seem to be short-term attempts to save money,” adds Thomssen – but he fears it may backfire on companies reducing their security workforce. Expecting fewer staff to take on more responsibility will likely have a detrimental effect – it may cause burnout. “I call it the layoff/quit combination,” he said.

Piacente also notes the cuts are not simply targeted at weeding out under performing employees. “There are great candidates impacted due to them being in the wrong place at the wrong time; and we are seeing this industry wide.”

Of course, there are many cybersecurity experts who believe this is a false and dangerous approach, and that cybersecurity is a necessity that should be expanded rather than cut. But that is an argument put forward by every business department in times of economic stress.

One effect of the cybersecurity layoffs and the accompanying increase in the number of experienced people seeking employment is that the recruitment market is moving from a candidate market toward a hirer market – just like home buying fluctuates between a buyer and a seller market depending on supply (properties available) and demand (money to buy). For many years, experienced cybersecurity engineers have been able to pick and choose their employer, and demand somewhat inflated salaries and conditions; but that is no longer the case. 

This is beginning to be apparent in the salaries offered. “They’re leveling off,” says Sasson, “maybe even going down. But this needs to be taken in the context of pretty dramatic increases from just a few quarters ago, during the candidate-driven market.” Sasson thought at the time that these were unsustainable. But now, “Folks that are looking for those massive compensation packages from just a year ago are going to have to adjust their expectations.”

Sam Del Toro, senior cybersecurity recruiter at Optomi, has seen a similar growing misalignment between compensation expectation and realization – especially in the more senior positions. Because of the layoffs, there are now more mid to senior level candidates looking for new opportunities. 

“On the other hand,” he said, “over the past couple of years we have seen cybersecurity compensation rise significantly. Now, as organizations are tightening their budgets and being more fiscally aware, it is making it tough to align candidate and client compensation.”

Thomssen sees another and different effect of the evolving hirer’s market. “I have seen security staff recruitment switch from direct hires to roles based on shorter term project contracts. In the past you would not see security professionals entertain such contracts, but the security staff recruitment landscape has seen a shift that way.”

It’s not clear whether this will develop into a common long term approach to cybersecurity recruitment or will just be a short-term solution to economic uncertainty. Is the gig economy coming to cybersecurity? It’s been growing in many other segments of employment, and perhaps the current economic climate will boost an existing trend just as Covid-19 boosted remote working.

One visible sign might come with an increase in the employment of virtual CISOs (vCISOs). This would retain access to high level expertise while reducing costs. Another might be an increased use of managed security service providers (MSSPs). “We’re seeing more and more security operations outsourced to consultants and contractors, or to vCISOs and Global CISOs, or whatever you’d like to call it,” comments Mika Aalto, co-founder and CEO at Hoxhunt. But he adds, “This can work with smaller companies, but it’s risky. Security should be looked at as a competitive advantage and a growth strategy, not a luxury.”

Piacente’s firm has seen a 20% increase in the new candidate flow. While the primary cause is the economy, the detailed cause is difficult to isolate. Cybersecurity has always experienced rapid churn with staff from all levels regularly moving to a new company for promotion or improved remuneration. This churn continues, but is complicated by employed people just looking around – not because they are being laid off, but just in case they will be laid off.

At the same time, some people who might normally be on the lookout for better opportunities are choosing to keep what they have until more stable conditions return. “One other observation in these cycles,” adds Piacente, “is that candidates who fall into the diversity category tend to be more resistant to making a change. Since there are already significantly less candidates in this category it makes it more difficult for companies to achieve their goals of creating a more diverse organization or program. This is when companies really need to place care, attention, and a dose of reality into their change initiatives.”

Bugcrowd is a firm that has actively sought to recruit from the ‘diversity’ pool. “Employers need to take a more active approach to recruiting from non-traditional backgrounds, which, in turn, significantly expands the candidate pool from just those with formal degrees to individuals, who, with the right training, have incredibly high-potential,” comments Gerry.

It could be expected that with some companies laying off experienced staff and others simply not hiring new staff, breaking into cybersecurity for new, inexperienced or diverse people will become even more difficult. After all, companies reducing staff levels to save money are not likely to spend money on in-house training for new inexperienced staff.

Del Toro doesn’t see it quite like that – it has always been almost impossible. “I do not think that the influx of [experienced] candidates on the market has much of an impact on newcomers finding opportunities because there are simply not enough entry level cybersecurity roles in general,” he said. “Organizations are almost always looking for mid-level candidates and above rather than bringing on competent and excited newbies, because the latter takes much more than fiscal resources.”

Recruitment going forward

It’s difficult to determine the actual number of experienced cybersecurity professionals being laid off among the overall staff reductions, but it is likely to be substantial. Although boards have become more open to the idea that security is a business enabler, there is nevertheless no discernible line between security and profit. There is, however, a direct line between security and cost. It is almost a no-brainer for security to be heavily featured among staff reductions. But this may be bad thinking.

For all layoffs, companies should proceed with caution. When large numbers of staff need to be cut for economic reasons, those same economic reasons may cause it to be done swiftly and perhaps brutally. These suddenly unemployed people will have inside knowledge of the company and its systems; and some will have thoughts of retaliation. At the same time, the company may have reduced the effectiveness of its cybersecurity team to counter a new threat from malicious recent insiders.

“Layoffs are affecting much of the tech industry and cybersecurity isn’t immune,” comments Mike Parkin, senior technical engineer at Vulcan Cyber. “While no department should really be immune when companies have to tighten their belts, the threat from losing skilled personnel in security operations can have a disproportionate effect.”

Overall, we’ve had a candidate market in cybersecurity recruitment but we’re shifting toward an employer market. Del Toro offers this advice for security people laid off and looking for a new position: “I would tell job seekers to be prepared for longer interview processes and longer time before offers are extended. Hiring managers are under more pressure to be diligent so candidates will need to be more cognizant of interview etiquette. Most importantly make sure you are keeping your skills sharp – use your time off to find passion projects and get better at your craft, not only to stay relevant in the security space but to renew your love for what you do!”

Related: Dozens of Cybersecurity Companies Announced Layoffs in Past Year

Related: US Gov Cybersecurity Apprenticeship Sprint: 190 New Programs, 7,000 People Hired

Related: How Will a Recession Affect CISOs?

Related: Four Ways to Close the OT Cybersecurity Talent Gap

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Industry Reactions to Hive Ransomware Takedown: Feedback Friday

industry-reactions-to-hive-ransomware-takedown:-feedback-friday

Authorities in the United States and Europe have announced the results of a major law enforcement operation targeting the Hive ransomware. 

Agencies from around the world worked together to take down Hive’s leak website and servers. In addition, agents hacked into Hive systems in July 2022, allowing them to identify targets and obtain decryption keys that allowed victims to recover encrypted files without paying a ransom.

Authorities continue to investigate Hive in an effort to identify the cybercriminals involved in the operation, including developers, administrators and affiliates. The US announced that it’s offering rewards of up to $10 million for information on these and other hackers. 

Several industry professionals have commented on various aspects of the Hive takedown, many noting that while Hive may have fallen, the threat actors behind the operation will likely continue their malicious activities. 

And the feedback begins…

Kimberly Goody, Senior Manager, Mandiant Intelligence, Google Cloud:

“We’ve seen multiple actors using Hive ransomware since it emerged, but the most prolific actor over the past year, based on our visibility, was UNC2727. Their operations are notable because they have commonly impacted the healthcare sector. Hive also hasn’t been the only ransomware in their toolkit; in the past we’ve seen them employ Conti and MountLocker among others. This shows that some actors already have relationships within the broad ecosystem that could enable them to easily shift to using another brand as part of their operations.”

Crane Hassold, former FBI cyber psychological operations analyst, Head of Research, Abnormal Security:

“Unlike some other cyber threats, like business email compromise (BEC), the ransomware landscape is very centralized, meaning a relatively small number of groups are responsible for a majority of all the attacks. The silver lining to this top-heavy ecosystem is that disruptive actions against one of these primary groups, such as law enforcement takedowns, can have a significant impact on the overall landscape. Since Hive has been one of the biggest players in the ransomware space over the past year, I would expect this takedown to have a noticeable impact on ransomware volume, at least in the short-term.

Because of the increased pressure from global law enforcement and the likely regulatory controls of cryptocurrency, one of the biggest drivers of today’s ransomware landscape, it’s very possible that we’ll start to see ransomware actors pivot to other types of cyber attacks, like BEC. BEC is the most financially-impactful cyber threat today and, instead of using their initial access malware to gain a foothold on a company’s network, they could simply reconfigure the malware to establish access to employee mailboxes, which could lead to more scaled and sophisticated vendor email compromise attacks.”

Satnam Narang, Senior Research Engineer, Tenable:

“The actions undertaken by U.S. agencies to disrupt the Hive ransomware group operation from within is an unprecedented step in the fight against ransomware, which has steadily remained the biggest threat facing most organizations today. While this may signal the end of the Hive ransomware group, its members and affiliates remain a threat. If there’s anything we’ve learned after past disruptive actions against ransomware groups, it’s that other groups will rise to fill the void left behind. Affiliates, which are typically responsible for conducting most of these attacks, can easily pivot to other affiliate programs of groups that remain operational and ransomware group members can also take their knowledge to these groups. One of the key ways ransomware groups gain attention and notoriety is by publishing their successful attacks on data leak sites on the dark web. It wouldn’t surprise me if ransomware groups see the threat posed by maintaining these sites and stop publicly listing these attacks in an attempt to stay under the radar.”

Kurt Baumgartner, Principal Researcher, Kaspersky:

“The frequency of ransomware attacks have been up, while victim payments have reportedly gone down. This is a great trend, and this coordinated effort is what we need to see more of from law enforcement around the world. Some of this effort in letting the activity progress may seem somewhat controversial, but generating decryption keys for victims over time helps to exhaust the group’s resources. 

Yes, in all likelihood, another gang is going to fill the void. It takes time and effort, but the incentives are in the hundreds of millions of dollars.

It’s somewhat surprising that the group housed their server resources in-country in Los Angeles. Apparently they thought everything was secured and hidden by the Tor network. Law enforcement put on display some impressive capabilities in infiltrating, seizing, and disrupting some of the gang’s resources. The actors behind this group have shown a reckless disregard for human life in their efforts to victimize schools and hospitals.”

Austin Berglas, Global Head of Professional Services, BlueVoyant:

“True dismantlement comes only when law enforcement can “put hands on” or arrest the individuals responsible. However, identifying the actual human beings behind the keyboard is a very difficult task.  Many of these cyber criminals are adept at anonymizing their online communications, locations, and infrastructure – often operating in global locations where international law enforcement cooperation is non-existent and utilizing bullet-proof hosting providers, which are unresponsive to legal process. 

There may be a temporary decline in ransomware activity in the wake of the website seizure as groups scramble to harden defenses and tighten their inner circles, but this will not make an overall, noticeable impact on global ransomware attacks. History has shown that ransomware gangs that disband either due to law enforcement actions, internal strife, or geo-political reasons will sometimes regroup under a different name. Conti, one of the most active ransomware gangs in recent history, shuttered operations soon after one of their members leaked internal Conti communications. Former members of the group are suspected of spinning off into newer groups such as BlackBasta and BlackByte.”

Jan Lovmand, CTO, BullWall:

“What is a significant win for law enforcement, could in reality be a road bump for the Hive Ransomware group. Whenever law enforcement starts paying too significant attention and effort to a particular group, they often scatter or reorganize under a different name. We have seen these seizes before only for the gang to surface with new extortion sites and ransomware names, or sometimes as several smaller groups. In the past they have seen these interruptions as temporary setbacks to a very lucrative business – similar to when a drug cartel has a shipment seized. They lose some income, get disrupted but rarely stop their criminal activity to become honest working individuals. Law enforcement in several regions have in the past recovered ransoms paid from other gangs or seized decryption keys, but what is different this time is how many victims the FBI have been able to help and for how long.”

Eric O’Neill, National Security Strategist, VMware:

“The disruption of the notorious Hive ransomware group demonstrates that the FBI has increased its ability to investigate and track threat actors across the Dark Web. This supports the commendable work the FBI’s IC3 is doing to track cybercrime attacks and coordinate efforts to repatriate stolen funds from cybercriminals, further reinforcing the importance of notifying the IC3 when a ransomware attack occurs.

It’s also worth noting how large the Dark Web has grown and how well-resourced new cyber crime syndicates, such as Hive, have become. The Dark Web is currently the third largest economy on Earth measured by GDP, which is larger than Japan or Germany. By 2025, this will grow larger than both countries combined. The FBI’s work to shut down Hive servers and repatriate encryption keys is a great step in the right direction, but it is only a step along a distant marathon to stop Dark Web-resourced cyber crime.”

Julia O’Toole, CEO, MyCena Security Solutions:

“When CISOs are reading the news about Hive’s takedown, it would be wise for them to also focus on the data being revealed about the gang’s victims and the financial losses they inflicted. The alarming numbers may be about Hive, but other ransomware gangs that have even more victims under their belt are still in operation and still pose a very real and credible threat today.

Organizations should use this takedown as a warning that ransomware is a damaging threat that is far from over. As the number one route to a ransomware attack is by gaining initial network access, network infrastructure access must be the number one priority.

When it comes to defense tools, access segmentation and encryption provide the greatest protection. These solutions stop data breaches from propagating through networks and morphing into ransomware attacks, while they also help prevent phishing attacks on employees, since they don’t know the passwords they use.”

Alfredo Hickman, Head of Information Security, Obsidian Security:

“Today’s news sends a very loud message to all cybercrime groups that if you are on this administration’s radar, they are going to be proactive – and if you get within reach of the American legal and justice system, they will hold you accountable. Some experts believe this approach still lacks teeth due to the risk/reward calculous that heavily favors cybercrime organizations operating outside the reach of the US justice system. 

However, this more aggressive and proactive approach to disrupting cybercrime operations should cause pause and recalculation within some organizations. As these announcements continue to roll out and as related cybercrime operations continue to be disrupted and pressure is applied to host nations, I believe there will be fewer attacks on at least the most sensitive establishments, such as hospitals or critical infrastructures due to the near-universal condemnation and political blowback.”

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Tens of Cybersecurity Companies Announced Layoffs in Past Year

tens-of-cybersecurity-companies-announced-layoffs-in-past-year

Tens of cybersecurity companies have announced cutting staff over the past year as part of reorganization strategies, in many cases triggered by the global economic slowdown. 

One of the most recent announcements was made by Sophos, which in mid-January confirmed reports that it’s laying off 10% of its global workforce. Roughly 450 people have reportedly lost their job as the company shifts focus to cybersecurity services, including managed detection and response.

At around the same time, identity verification company Jumio also confirmed laying off roughly 100 people. 

In May 2022, cloud security company Lacework announced terminating 300 jobs, representing roughly 20% of its workforce. 

Another company that laid off a significant portion of its workforce last year is OneTrust, which provides privacy, security, and data governance technology. Nearly 1,000 employees were let go, roughly a quarter of the firm’s workforce. 

IronNet, the cybersecurity firm founded by former NSA director Keith Alexander, fired 17% of staff in June and another 35% in September due to significant problems. 

In the fall, Cybereason announced plans to reduce its staff by 17%, just months after cutting 10% of its workforce. In total, the company fired approximately 300 employees. 

Cloud security firm Aqua Security has laid off 10% of its workforce, and Malwarebytes terminated 14% of its staff (around 125 people). Gen Digital, created through the merger of antivirus companies Avast and NortonLifeLock, let go of a quarter of employees, in some cases due to their activities overlapping with the other company’s workers. 

In October, developer security company Snyk — recently valued at $7.4 billion — announced that it had started restructuring and reducing its global workforce, impacting 198 employees, or 14% of its total workforce.

The same month, security and application delivery solutions provider F5 announced cutting approximately 100 roles, representing 1% of its global workforce. 

Enterprise security solutions provider Forescout Technologies has reportedly laid off 100 of 170 employees at its R&D center in Israel, after firing 100 other employees in October. 

The companies that sacked employees cited market conditions, strategic reorganization and shifting priorities when motivating their decision. 

Data from Layoffs.fyi shows that tens of cybersecurity firms terminated staff over the past year. The list includes Tripwire, Deep Instinct, Pipl, Transmit Security, Tufin, Checkmarx, Varonis, Perimeter 81, and Armis.

On the other hand, many of those who have been terminated may not have any difficulties securing a job at a different company. 

According to a study conducted by the nonprofit (ISC)², the global cybersecurity workforce is at an all-time high, with an estimated 4.7 million professionals. However, the study found that an additional 3.4 million cybersecurity workers are needed, with 70% of the 11,000 cybersecurity professionals who took part in a survey conducted by the nonprofit saying that their organization does not have enough cybersecurity employees.

Related: How a VC Chooses Which Cybersecurity Startups to Fund in Challenging Times 

Related: Predictions 2023: Big Tech’s Coming Security Shopping Spree

Related: Cybersecurity Workforce Study Needs to be Taken with a Pinch of Salt

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Microsoft Invests Billions in ChatGPT-Maker OpenAI

microsoft-invests-billions-in-chatgpt-maker-openai

Microsoft says it is making a “multiyear, multibillion dollar investment” in the artificial intelligence startup OpenAI, maker of ChatGPT and other tools that can write readable text and generate new images.

The tech giant on Monday described its new agreement as the third stage of a growing partnership with San Francisco-based OpenAI that began with a $1 billion investment in 2019. It didn’t disclose the dollar amount for its latest investment.

The partnership positions Microsoft to sharpen its competition with Google in commercializing new AI breakthroughs that could transform numerous professions, as well as the internet search business.

OpenAI’s free writing tool ChatGPT launched on Nov. 30 and has brought public attention to the possibilities of new advances in AI.

It’s part of a new generation of machine-learning systems that can converse, generate readable text on demand and produce novel images and video based on what they’ve learned from a vast database of digital books, online writings and other media.

Microsoft’s partnership enables it to capitalize on OpenAI’s technology. Microsoft’s supercomputers are helping to power the startup’s energy-hungry AI systems, while the Redmond, Washington-based tech giant will be able to further integrate OpenAI technology into Microsoft products.

“In this next phase of our partnership,” customers who use Microsoft’s Azure cloud computing platform will have access to new AI tools to build and run their applications, said a statement from Microsoft CEO Satya Nadella.

“There’s lots of ways that the models that OpenAI is building would be really appealing for Microsoft’s set of offerings,” said Rowan Curran, an analyst at market research firm Forrester. That could include helping to generate text and images for new slide presentations, or creating smarter word processors, Curran said.

The technology could also help Microsoft’s own search engine, Bing, compete with Google in answering search queries with more complete answers instead of just links.

OpenAI started out as a nonprofit artificial intelligence research company when it launched in December 2015. With Tesla CEO Elon Musk as its co-chair and among its early investors, the organization’s stated aims were to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”

That changed in 2018 when it incorporated a for-profit business Open AI LP, and shifted nearly all its staff into the business, not long after releasing its first generation of the GPT model for generating human-like paragraphs of readable text. Musk also left its board in 2018.

OpenAI said in its statement announcing the deal Monday that it will still be governed by its nonprofit arm and that it remains a “capped-profit” company, though it didn’t specify what limits it sets on its profits.

“This structure allows us to raise the capital we need to fulfill our mission without sacrificing our core beliefs about broadly sharing benefits and the need to prioritize safety,” it said.

OpenAI’s other products include the image-generator DALL-E, first released in 2021, the computer programming assistant Codex and the speech recognition tool Whisper.

The investment announcement came a day before Microsoft was scheduled to report its earnings from the October-December financial quarter and after disclosing last week its plans to lay off 10,000 employees, close to 5% of its global workforce.

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