Latest news with #IToutage
Gizmodo
20-05-2025
- Business
- Gizmodo
Delta Can Sue CrowdStrike Over Outage That Grounded Thousands of Flights, Judge Says
Delta says the biggest IT outage in history cost it $550 million last summer. Cybersecurity firm CrowdStrike has tried to limit the fallout from its global outage last summer, which wreaked havoc on airlines, financial services, and numerous other industries. When Delta Air Lines filed a lawsuit to recoup its losses, CrowdStrike tried having the case dismissed. But now a federal judge has given Delta the okay to proceed with its lawsuit over the outage, pointing out that CrowdStrike's own president admitted that it did something 'horribly wrong'. The July 2024 screwup, which has since been described as the largest IT outage in history, affected computers running on Microsoft Windows. Per CrowdStrike, it was caused by a faulty software update that passed the company's validation checks 'despite containing problematic content data.' Once the update went through, millions of devices worldwide flashed the Blue Screen of Death. CrowdStrike's outage is estimated to have cost U.S. Fortune 500 Companies $5.4 billion. But amongst airline companies, Delta was hit the hardest. Per Reuters, Delta says it cancelled 7,000 flights and accrued $550 million in lost revenue and additional costs. (Although, Delta did save $50 million on fuel from cancelling flights so, hey. That's something.) Delta filed its initial lawsuit against CrowdStrike three months after the outage. Although CrowdStrike tried to have it dismissed, Judge Kelly Lee Ellerbe of the Fulton County Superior Court ruled that Delta can try to prove CrowdStrike's gross negligence, writing, 'Delta has specifically pled that if CrowdStrike had tested the July update on one computer before its deployment, the programming error would have been detected.' In addition, Reuters reported that Ellerbe is allowing Delta to pursue a computer trespass claim because Delta states that CrowdStrike falsely promised not to add an 'unauthorized back door' into the company's computers. CrowdStrike, meanwhile, claims that Georgia 'specifically precludes Delta's efforts to recover through tort claims the economic damages it claims to have suffered,' per CNBC. In addition, CrowdStrike said that Delta was an 'outlier' that refused help and its own systems likely made the incident worse. CrowdStrikes wrote, 'Although Delta acknowledges that it took just hours — not days — for Delta employees to [fix the outage], cancellations far exceeded the flight disruptions its peer airlines experienced.' It's true that other airlines recovered faster (for example, United only cancelled about 1,500 flights). Per Fortune, one reason that Delta was hit harder is because of its heavy reliance on its Atlanta hub. In an earlier letter that CrowdStrike's lawyer, Michael Carlinsky, sent Delta denying any gross negligence, Carlinsky wrote that Delta needs to address the 'design and operational resiliency capabilities' of its IT structure. He said that if Delta 'pursue[s] this path, Delta will have to explain to the public, its shareholders, and ultimately a jury why CrowdStrike took responsibility for its actions — swiftly, transparently, and constructively — while Delta did not.' But CrowdStrike really shouldn't pat itself on the back for its response to the outage. Shortly after the incident, CrowdStrike sent out $10 apology gift cards for UberEats that didn't even work. And about a week after Carlinsky's letter to Delta, CrowdStrike's president, Michael Sentonas, attended the Pwnie Awards to accept his company's win for Most Epic Fail. 'Definitely not the award to be proud of receiving,' Sentonas said. 'I think the team was surprised when I said straight away that I'd come and get it because we got this horribly wrong…It's super important to own it when you do things horribly wrong, which we did in this case.' Sentona's acceptance speech was referenced in Ellerbe's decision where she wrote that 'its own president publicly stated that CrowdStrike did something 'horribly wrong.'' But per Reuters, Carlinsky believes that a judge will either say Delta's case has no merit or keep damages in the 'single-digit millions of dollars' region. This is a small win for Delta. But just as CrowdStrike must atone for its apparent sins, Delta has to do so, too. Earlier this month, U.S. District Judge Mark Cohen in Atlanta said that Delta must face a lawsuit from passengers who were refused full refunds for canceled flights in connection with the outage.
Daily Mail
20-05-2025
- Business
- Daily Mail
Barclays boss blames third-party software for huge IT outage earlier in the year
Barclays suffered a 'software issue' and not a cyber attack when its systems went down in January, its chief executive told MPs today. Speaking to the Treasury Select Committee this morning, Barclays boss Vim Maru apologised to customers for the IT outage on 31 January. Barclays customers experienced three days of outages, meaning they were unable to make essential transactions, including mortgage payments. The bank previously told the Committee that it expected to pay between £5million and £7.5million to customers in compensation. Maru told MPs that the issue was 'not a cyber or malicious act' and that the bank had looked into whether the issue had been because of underinvestment or because it was pay day. 'We don't find any correlation between those things,' he said. 'A software issue was the root cause. We've worked with a third-party provider that provides us with that software. 'We've learned the lessons around that, we've put a fix in place that means we won't have a recurrence. 'Looking forward, there's a further enhancement that we're making that's in the middle of implementation.' Maru said the bank had invested 'many, many tens of millions of pounds to make sure that our systems are in the right place' and that its incident levels have been dropping. It comes just weeks after M&S, Co-op and Harrods faced large-scale cyber attacks which froze critical systems. HSBC boss Ian Stuart told the Committee that cybersecurity 'does keep me awake [at night]' and 'is now very much top of the agenda' as the bank invests 'hundreds of millions'. 'We could be attacked, and we're being attacked all the time. So the defence mechanisms are critical. 'The amount of money we're all spending on our systems is absolutely enormous … it has to because our customers rely on our systems.' 33 days of unplanned outages in the past two years.
The Guardian
09-05-2025
- Business
- The Guardian
‘Tone deaf': US tech company responsible for global IT outage to cut jobs and use AI
The cybersecurity company that became a household name after causing a massive global IT outage last year has announced it will cut 5% of its workforce in part due to 'AI efficiency'. In a note to staff earlier this week, released in stock market filings in the US, CrowdStrike's chief executive, George Kurtz, announced that 500 positions, or 5% of its workforce, would be cut globally, citing AI efficiencies created in the business. 'We're operating in a market and technology inflection point, with AI reshaping every industry, accelerating threats, and evolving customer needs,' he said. Kurtz said AI 'flattens our hiring curve, and helps us innovate from idea to product faster', adding it 'drives efficiencies across both the front and back office'. 'AI is a force multiplier throughout the business,' he said. Other reasons for the cuts included market demand for sustained growth and expanding the product offering. The company expects to incur up to US$53m in costs as a result of the job cuts. CrowdStrike reported in March revenue of US$1bn for the fourth financial quarter of 2025, up 25% on the same quarter in 2024, with a loss of US$92m. In July last year, CrowdStrike pushed out a faulty update to its software designed to detect cybersecurity threats that brought down 8.5m Windows systems worldwide. The outage caused chaos at airports, and took down computers in hospitals, TV networks, payment systems and people's personal computers. Aaron McEwan, vice-president of research and advisory at consultancy Gartner, said he was sceptical when companies announced AI efficiencies close to reduced revenue forecasts, as CrowdStrike had in March. 'I think particularly in the tech sector … it's a way of justifying a reduction in the workforce because [of] a financial issue,' he said. 'So either they're not tracking well financially, or they're trying to send a message to investors that good times are around the corner. So I'm immediately sceptical.' McEwan said companies were facing pressure to deliver on the big investments made in AI. 'The productivity gains that we expect to see from AI just aren't flowing through.' Gartner research showed across workforces less than 50% of employees are using AI in their job, and only 8% of employees are using AI tools to improve productivity. Toby Walsh, professor of artificial intelligence at the University of New South Wales, said CrowdStrike's announcement was 'pretty tone deaf' after the outage last year. 'They would have been better redeploying this 5% of people to emergency response and bug fixing,' he said. Walsh said the market should expect more of these announcements in future. 'It's pretty simple: more profits for companies, less work for workers. But we should learn from the first Industrial Revolution. If we stand up in solidarity, we can use these savings to improve quality and quantity of work for all.' Niusha Shafiabady, associate professor in computational intelligence at the Australian Catholic University, said AI job replacements were an 'unavoidable reality'. 'No matter what we believe is moral and right, this change will happen. Unfortunately, a lot of people will lose their traditional jobs to AI and technology,' she said. 'If [companies] see that they are saving money by using AI and technology and enhancing their services, they will ask their employees to leave. This is the reality.' A World Economic Forum report in 2023 found nearly 23% of all jobs globally will change in the next five years due to AI and other macroeconomic trends. While 69m jobs are expected to be created, 83m jobs could be eliminated, leading to a net decrease of 2%, Shafiabady said. McEwan said companies – tech companies in particular – would be looking for ways to use AI to reduce workforces over time. 'I have no doubt that there will be the emergence of companies that are able to reduce their workforce and substantially because of AI,' he said. 'It'll depend on the type of product that they're selling. But at the moment most companies would be wise to look at how they can use AI to augment their workforce rather than replace.' Has your job been lost to AI? Get in touch –
