Kaspersky to Shut US Business, Lay Off Remaining 50 Workers

Kaspersky will cease operations in the United States a month after the Biden administration banned the Russian cybersecurity vendor from selling software in the country.

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The Moscow-based company said it will gradually eliminate U.S.-based positions – which today number less than 50 – as it starts winding down American operations Friday. The U.S. Department of Commerce in June said Kaspersky will no longer be allowed to sell software or provide updates to existing customers starting Sept. 29, after it determined that Russian hackers could turn Kaspersky’s software against users (see: Biden Administration Bans Kaspersky Antivirus Software).

“The company has carefully examined and evaluated the impact of the U.S. legal requirements and made this sad and difficult decision as business opportunities in the country are no longer viable,” a Kaspersky spokesperson told Information Security Media Group in an emailed statement. “Being a global cybersecurity vendor, the company will continue investing in strategic markets.”

Kaspersky US Operations Are Not What They Were

The decision to totally pull out of the U.S. marks a dramatic about-face for Kaspersky, which last month vowed to “pursue all legally available options to preserve its current operations and relationships” and said it was still allowed to sell threat intelligence and training in the U.S. Kaspersky has been under close watch since security agencies determined that Russia interfered in the 2016 U.S. presidential election.

“Russia has shown it has the capacity and, even more than that, the intent to exploit Russian companies like Kaspersky to collect and weaponize the personal information of Americans,” U.S. Commerce Secretary Gina Raimondo said last month. “That’s why we are compelled to take the action that we’re taking today.”

In June, the U.S. Treasury Department banned 12 Kaspersky board members and executives – including the head of research and development and head of consumer and corporate business – from carrying out financial transactions in the U.S. Kaspersky said the banned individuals don’t “have any ties to the Russian military and intelligence authorities or have anything to do with the Russian government” (see: US Sanctions 12 Kaspersky Executives).

Years of intense scrutiny have minimized the company’s footprint. Just 4% of paid antivirus users opt for Kaspersky, putting it behind Norton, McAfee, Malwarebytes, Avast, AVG, Webroot and Bitdefender, according to Security.org. And on the enterprise front, Kaspersky was the world’s ninth-largest endpoint security vendor in June 2022, with only 2.9% market share, according to IDC.

The vast majority of Kaspersky’s 4,000-person workforce is based in Russia, with just 102 employees in the United Kingdom and 72 in India, IT-Harvest found. Kaspersky hasn’t broken out sales by geography since 2021, when the firm saw a 6% drop in North American sales but a 25% increase in sales to Russia, the Baltics and Central Asia, and double-digit revenue growth in Latin America and the Middle East.

Since the 2022 invasion of Ukraine, Kaspersky’s footprint in North America has gotten smaller. Executive Vice President for North American Finance and Operations Angelo Gentile retired from Kaspersky in April. Anthony Bellia, Americas support and services leader, left Kaspersky in September, and North America Managing Director Rob Cataldo was reassigned to lead Kaspersky’s global sales network in October.

A Divorce 8 Years in the Making

Although the Commerce Department ban was the final nail in Kaspersky’s coffin, the company’s separation from the United States has been eight years in the making. The U.S. Department of Homeland Security issued a directive in September 2017 mandating civilian federal government agencies remove Kaspersky’s software after the company was accused of being linked to Russian intelligence services (see: How Much Damage Would US Action Against Kaspersky Inflict?)

In December 2017, then-President Donald Trump signed a broader defense policy spending bill that bans Kaspersky’s software from both civilian and military networks. The ban on U.S. government sales made many American customers in the private sector, as well as state and local governments, reluctant to buy Kaspersky’s technology even though sales aren’t outright prohibited.

Kaspersky’s problems only intensified after Russia’s invasion of Ukraine in February 2022. A month later, the U.S. Federal Communications Commission added Kaspersky to its list of telecom equipment and service providers considered a national security risk. The move made Kaspersky the first Russian firm on the list, which previously only included Chinese companies.

In August 2022, Threatpost, an English-language cybersecurity news publication owned by Kaspersky, stopped publishing new content. And in March 2023, The Wall Street Journal reported the Commerce Department was weighing enforcement action against Kaspersky under rules aimed at protecting U.S. internet users from Russia- and China-based threats that allow for the outright ban of particular apps.

Although the ban wasn’t actually announced until 15 months later, the wheels were in motion on the process that ultimately became Kaspersky’s undoing in the U.S.