Financial Fallout: The True Cost of Employee Loss
Category
Awareness, News
Risk Level
When thousands of workers are laid off at once, it's not just jobs that disappear, and the technical and financial ripple effects reach every corner of the country.
In today’s world, it isn’t abnormal to hear of a company letting go of a number of employees due to any number of factors, including budgetary constraints. In fact, March 2025 saw multiple layoffs in both the private and public sector. Siemens was reported as planning to cut 5,600 jobs in its Digital Industries business - approximately 8% of the company’s total population.
The public sector has also seen a large initiative to reduce federal employee numbers, with an emphasis to continue Reduction in Force (RIF) across the majority of governmental agencies. According to a report released by the Trump administration, tens of thousands of probationary[1] [2] federal workers across the United States were released from service within the past 3 months.
“What are the biggest impacts as a result of layoffs?
One of the major impacts of layoffs, and an often forgotten piece, is the sunk cost of onboarding and training. According to data from the Society for Human Resource Management (SHRM), the average cost to onboard a new hire is over $4,600 per employee. In addition, all costs associated with upskilling and knowledge retention are lost. That adds up – especially when you consider not just getting those certifications, but also keeping them current.
Putting aside the significant financial costs of mass layoffs, one of the more dangerous results of employee loss is the direct impact to the cybersecurity and reliability of a company’s information. As was stated previously, the loss of employees is not just the emptying of a role – the internal cybersecurity training that you provided to that user, at large cost to your company, is also lost.
Gaps in organization-specific cyber threats
According to studies like the Verizon 2024 DBIR, most cyber incidents actually come down to human error. In fact, 68% of all breaches involved some kind of human mistake – phishing being the biggest culprit. Phishing attempts alone have shot up by 65% in the past year, and about 76% of businesses say they’ve been hit by at least one. So, when a company loses a ton of employees, it’s not just losing staff – it’s also losing built-up cybersecurity awareness. Layoffs often create chaos and low morale – prime conditions for phishing attacks (e.g., emails pretending to be HR updates, severance info, etc.).
Huge hit to a company’s daily procedures
Losing a big chunk of your team can also cause serious imbalances in your organization’s processes and workflows. This matters for any company, but it’s especially important if you're aiming for something like CMMC certification. During a assessment or audit for any cybersecurity compliance framework, your subject matter experts are usually the ones who really know the ins and outs of your cyber controls. If those people suddenly leave, a lot of that deep, hard-to-replace knowledge about your specific systems (and your compliance status) goes with them. And even if the main point of contact for a system sticks around, there’s still a risk – any missing information they don’t have can make the difference between passing and failing an audit.
Opening up the door to a large number of insider threats, all at once
Speaking of risk, the loss of potentially thousands of employees brings in another potential concern – insider, or recently made outsider, threats. Disgruntled employees, having just been laid off, have the potential to act out by stealing data or leaking sensitive information. However, insider threats do not have to be innately malicious. When thousands of employees are fired at the same time, it’s reasonable that even well-meaning employees might accidentally take sensitive data with them. All it would take is a single USB with company data mistakenly taken home to cause an incident without having direct malicious intent.
Risks to access control becomes immediately apparent
When one person leaves a company, it’s usually pretty straightforward to cut off their access to important systems. But when thousands of employees are laid off all at once – especially with little warning to the IT team – it’s a whole different story. It’s easy for accounts to slip through the cracks; leaving the door open for unauthorized access. On top of that, if the layoffs also affect your cybersecurity or IT teams, you might not have enough people to handle the huge task of deactivating all those accounts properly.
Hive Systems is here to help close the gaps left behind in your organization. Whether it’s through staff augmentation, helping strategize how you can remain secure with a reduced IT and cybersecurity workforce, or providing cybersecurity and phishing training, we’ll help you combat the challenges layoffs create.
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