Ransomware attacks hit manufacturing hard in 2023

Dive Brief:

• Ransomware attacks and extortion payments hit a five-year high in manufacturing and production organizations last year, Sophos said in a report published last month.
• Two-thirds of manufacturing and production organizations experienced a ransomware attack last year. Of those, more than 3 in 5 victim organizations reported paying a ransom, according to a Sophos commissioned survey. 
• “While most ransomware attacks are opportunistic, attacks against manufacturing organizations encounter less resistance and are therefore more successful,” John Shier, Field CTO of threat intelligence at Sophos, said via email.

Dive Insight:

The manufacturing sector’s propensity to pay extortion demands made it one of the top two industries — along with energy and oil and gas — to pay ransoms to recover encrypted data in 2023, according to Sophos.

Clorox reported severe operational disruptions and extended product shortages from a major cyberattack in August 2023. The company incurred $49 million in costs from the cyberattack and recovery efforts remain ongoing.

Ransom payments from manufacturing businesses surged in 2023 after the sector reported one of the lowest rates of ransom payments across all sectors the previous year. The percentage of manufacturing organizations that paid a ransom jumped from 34% in 2022 to 62% last year, Sophos found.

The amount paid in ransoms also jumped last year. Among the companies that reported initial ransom demands, 3 in 5 received asks for at least $1 million. The average ransom payment in the manufacturing sector increased 88% to almost $2.4 million last year.

Manufacturing organizations incurred other major financial impacts following ransomware attacks last year. Businesses reported an average recovery cost of almost $1.7 million last year, a 55% increase from 2022.

The report is based on a Vanson Bourne survey of 585 IT and cybersecurity leaders at manufacturing organizations with up to 5,000 employees in the Americas, Europe, the Middle East, Africa and the Asia-Pacific region during January and February.