CybersecurityPartner content

There’s no doubt that data breaches can be extremely damaging to a company and potentially lead to its demise in certain circumstances. The media abounds with examples of high-profile cyberattacks that have become more disruptive than ever before and have cost many world-renowned companies dearly, leaving deep marks on their budget and image. And while it’s true that larger businesses tend to fare better than smaller firms when faced with a data breach thanks to their extensive resources and capabilities, survival is not always guaranteed. 

When people think about the consequences of a cyberattack on a company, they usually focus solely on the material aspects and the marred reputations, ignoring all the other implications that often derive from such an unfortunate event. Beyond the bad press and the financial loss that enterprises are bound to suffer after a cyberattack, there are other aspects to take into account when assessing the damages and counting the victims. 

Even if a business manages to overcome the initial impact and stabilise itself to some extent, failure may still intervene later down the road due to all the lesser-known effects that may not be immediately noticeable. It’s like suffering a slow death through a thousand paper cuts, which leaves people wondering about the factors that caused the company to sink. Learning about the far-reaching implications and long-lasting impacts of a data breach not only removes the surprise factor from the equation but also enables organisations to handle these types of events more effectively.  

Legal issues 

A company that suffers a data breach can’t get away with simply notifying the affected parties about the incident and then going about their business as usual. There’s a lot of explaining to do about how the breach happened and who was responsible for it, and they have to answer for it in front of the authorities and the adequate regulatory bodies tasked with investigating these types of crimes.  

Businesses that collect and store sensitive data from their clients are required by law to have adequate security measures in place so they can keep the data safe from potential hazards and risks such as data breaches. So, if the information gets lost or stolen either due to human error or poor security practices, they are going to be held liable for the damages resulting from it.  

Long story short, data breaches can quickly turn into a lengthy legal nightmare where the company has to deal with fines, penalties, compensation claims – which you can read more about at – enhanced regulatory scrutiny, lawsuits and other legal actions that can span for years in some cases and translate into huge expenses. 

Severed partnerships 

A data breach can have devastating consequences at all levels both within and outside the company. The chaos and mayhem following a cyberattack inevitably lead to tensions that can affect the company’s management, causing many professionals to crack under pressure. If they are not properly prepared to handle such a situation, internal conflicts might arise and cause the company to disintegrate from within.

The same tension can expand beyond internal circles and impact collaborations and relationships with partners and suppliers. Some providers may no longer want to remain associated with the breached company and decide to permanently sever ties with them, which can be a huge hit for any business. 

Loss of market share 

If the management has a good emergency plan in place and somehow manages to keep its team on track and also preserve all its partnerships intact, there’s still the looming risk of market share erosion. 

It’s common for the affected company to experience a decline in market share as many of their clients turn to their competitors in search of a safer alternative. This represents a good opportunity for other businesses that provide the same types of products/services to take advantage of the situation and capitalize on their loss. It can be tough, if not downright impossible to convince those customers to come back or attract new ones in these circumstances.  

Low investor confidence 

If winning back customers’ trust and confidence after a data breach is extremely difficult, the same thing can be said about investors. Once the event has hit the news and everyone has learned about it, the possibility of finding an investor willing to put their money on the line for a company that is walking on thin ice is going to be significantly reduced.  

That’s not to say no investor will ever take an interest in the breached company again, but by the time it all blows over and people forget about the events, it might be too late for the company to recover. 


Managing a crisis like a data breach takes time and patience, and as we all know in the business world time is money. Companies are often forced to shut down operations entirely or partially while investigations regarding the breach are conducted. Things may remain this way until the cause of the event is determined and solutions are found to prevent the situation from repeating.

It can take weeks or even months for the company to start its engines again and ensure things can go back to normal. Meanwhile, every minute that the business is not fully operational results in lost productivity and revenue. Also, the business might have to divert some of its resources towards employee training, rebuilding certain systems, or enhancing security infrastructure, which can further impact the long-term performance of the company. 

Wrapping up 

Cyberattacks are a reality that most companies don’t want to think about but that they should certainly take into consideration because the chances of being at the receiving end are increasingly high. Given the extensive impact that a data breach can have, beyond loss of revenue and reputation, it’s crucial for businesses in every industry and niche to know the risks they expose themselves to and take adequate measures to minimise them.