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Resignations and Data Risks: How Employee Departures and Layoffs Increase Data Loss

  • Pallavi Pavithran
As workforce dynamics shift with increased employee departures and layoffs, organizations must prioritize data security to mitigate rising risks. 76%[1] of organizations have detected increased insider threat activity over the past five years which usually happens during layoffs and resignations.  When employees depart, the risk of sensitive data being exposed, stolen, or mishandled increases significantly. This risk has increased with the rise of remote work and the use of cloud technologies, which started during the 2019 pandemic.  Many companies are still relying on legacy security systems that were not designed to cope with the current flexible, cloud-based environments. These older systems often fail to provide the necessary protection for modern challenges.

The Impact of Resignations and Layoffs on Data Security Risks

Departing employees may take valuable company information with them, including: 

  • Proprietary code or software 
  • Proprietary data, such as business strategies, intellectual property, or patents 
  • Customer data or contact lists

These data leaks caused by leaving employees can be intentional or accidental. 

Departing Employees: Malicious vs. Careless

There are two types of employees who pose data threats. 

Malicious Employees: Some exited employees may intentionally steal valuable company data (e.g., customer info, intellectual property) to benefit in their next job. 

Example: A departing employee might feel entitled to data because of their relationships with clients or their contributions to a project. 

Careless Employees: Employees may unintentionally take data with them when leaving.  

Example: A careless employee may accidentally transfer sensitive files, like financial data or client information, to a USB drive while attempting to back up personal documents. USB drives, due to their ease of use, are often the method of choice for these employees to move data without thinking about security. This can lead to accidental data loss if the files are mishandled or lost. 

Understanding whether the employee is malicious, or careless helps determine the best way to handle the situation. Even seemingly innocent actions, like using a browser such as Google Chrome, can lead to data exposure if sensitive files are accessed or shared without proper security measures in place.

The Difficulty of Tracking Sensitive Data Risks During Employee Transitions

Tracking data movement and potential leaks during employee transitions is a complex task for organizations. Without proper oversight, unauthorized employee access to sensitive data can lead to serious breaches, especially if the departure happens suddenly or without proper monitoring. 

Here are some of the reasons why:

  • Multiple Devices & Platforms

    Employees use different devices (laptops, phones, desktops) and platforms (email, cloud storage, USB drives) to work with company data. Keeping track of all these can be hard, especially when employees work from home or in a hybrid setup. These diverse tools can create multiple threat vectors for data breaches if not properly monitored.
    ‘According to IBM reports, 40% of data breaches involve data stored across multiple environments, with breaches in public clouds costing the most - averaging USD 5.17 million.’

  • Quick Departures

    When employees leave suddenly, there’s not always enough time to check what data they have taken with them. The faster someone leaves, the less time security teams must check it, making it more difficult to ensure nothing is taken or leaked, increasing the risk of data exfiltration.

  • No Real-Time Insights

    Sometimes companies don’t have live tracking of what data employees are moving or accessing. Without this real-time visibility, it’s hard to quickly stop data from being stolen or leaked.

  • Multiple Resignations/Layoffs

    When multiple employees leave at once (for reasons like layoffs or mass resignations), the risk of data leaks or theft goes up. It’s harder for security teams to manage everything happening at once. As organizations face these challenges, adopting advanced data security measures to prevent data leaks becomes critical.

How to Protect Your Organization from Data Theft or Data Leaks by Leaving Employees

To prevent any data leaks or security issues during employee transitions, there are several steps organizations can take:

Ways to protect organizational data
Ways to Protect Your Organization from Data Theft When Employees Leave

Real-Time Monitoring and Intervention

Monitor departing employees’ data activity in real–time and prevent sensitive information transfers to stop both malicious and careless behavior.

Avoid Careless Actions

Employees can unintentionally leak data, like sharing sensitive files with the wrong person in a cloud service. With tools like DLP, you can detect accidental mistakes and set up automated processes to prevent them from becoming security issues.

Keep an Eye on Data Across Various Touchpoints

Data can be moved through various platforms, including email, cloud storage, and web apps. To get a complete picture of what’s happening, use tools that monitor all these channels in one place.

Monitor Even After Employees Exit

Utilize tools to track data activity even after an employee has left the organization. Monitoring this post-departure period helps to uncover any ongoing or unusual actions related to sensitive information, like accessing, sharing, or downloading files. This continued vigilance ensures that any unauthorized behavior is detected promptly, enabling you to take immediate action.  

In case of suspicious activity, detailed reports can be quickly generated to aid HR or legal teams in further investigations.

Other Key Strategies to Reduce Data Theft Risk:
  • Look for early warning signs and take action to prevent data theft before it happens, as it’s more effective than handling the fallout.
  • Ensure employees understand which data is company-owned and establish clear rules for managing data during and after their employment.
  • Appoint a responsible person to oversee data theft prevention, including employee training and regular policy updates.
  • HR and IT teams should collaborate during offboarding to ensure departing employees lose access to sensitive data and return all company equipment on time.

Companies can follow these steps and adopt an efficient DLP tool to minimize the risk of data theft when employees leave.

The Role of Data Loss Prevention (DLP) Tools in Securing Data During Employee Resignation and Layoff

DLP is a tool or method designed to prevent sensitive information from being accidentally or intentionally exposed, shared, or transferred in an unsafe way. 

It protects sensitive data no matter where it’s stored — whether on your company’s servers, in the cloud, on the network, or even on personal devices like laptops or smartphones.

How DLP Helps:

  • DLP tools inspect data and monitor user activity to detect suspicious actions.
  • If anything, risky is identified (like unauthorized access), DLP can block, delete, or encrypt the data.
  • Admins can limit access to ensure former employees can't access or copy sensitive files.
  • DLP can enforce security policies during an employee’s departure, such as wiping sensitive files from their devices.
Different DLP solutions to be used during employee resignation or layoff
Different DLP solutions to be used during employee resignation or layoff

DLP Best Practices for Employee Layoffs

  • Pre-Layoff Preparation: Create a clear plan for DLP tasks and limit knowledge of layoffs to senior management and security teams.
  • Prevent Data Theft: Implement DLP controls on devices before layoffs are announced, like disabling USB ports or file uploads to external networks and removing access permissions before you finalize the layoff.
  • Post-Departure Monitoring: Continue monitoring accounts and devices after employees leave to detect any attempts to access company data.

Protect Your Data: The Essential Network DLP Buyers Guide

Choosing the right Network Data Loss Prevention (DLP) solution is critical. Download our comprehensive guide to discover:

  • Key features to look for in a Network DLP solution
  • How to strengthen your data security
  • How DLP improves content inspection accuracy, reduces risk, and more!
Download the Guide Now

How Fidelis Network® Data Loss Prevention Solution Protects Your Data

The Fidelis Network® Data Loss Prevention Solution, powered by its patented Deep Session Inspection® technology, allows organizations to investigate threats and stop sessions that violate policies, offering detailed insights about who is sending and receiving data and what type of data is involved. 

How Fidelis DLP Tackles Data Threats:

  • Insider Threats: Detects unusual behavior from employees attempting to transfer sensitive data to unauthorized locations.
  • Cloud Misconfigurations: Prevents unauthorized access to and ensures security for cloud-stored data.
  • Phishing Attacks: Scan emails and attachments for malicious content, reducing phishing risks.

Conclusion

There is always a risk of data leaks or other security concerns associated with employee departures. While implementing the right steps, and policies, and maintaining disciplined data handling practices can help prevent breaches to some extent, they may not provide complete protection. Using a robust DLP solution that helps in detecting and preventing such leaks is the right choice for companies to ensure the overall security of data during employee resignations and layoffs.

About Author

Picture of Pallavi Pavithran
Pallavi Pavithran

Pallavi is a tech writer with a deep enthusiasm for cybersecurity and emerging technologies. With a keen interest in digital security, she simplifies complex concepts and provides valuable insights to help businesses stay ahead and effectively navigate the ever-evolving cybersecurity landscape.

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