Why Cognizant Is Being Sued for $380 Mn Lawsuit - Explained

Clorox has filed a $380 million lawsuit against IT services giant Cognizant, alleging the company has negligently provided employee login credentials to a cybercriminal without proper identity checks. The breach resulted in a major cyberattack that severely disrupted his operations across the US.

The complainant claimed that Cognizant’s service desk failed to follow fundamental authentication procedure. It allowed a cybercriminal to infiltrate its systems in August 2023. The attacker posed as a Clorox employee and requested a password reset via phone, according to media reports.

The lawsuit even stated that Cognizant support agent approved the request without performing necessary identity checks. “The resulting cyberattack was debilitating. It paralysed Clorox’s corporate network and crippled business operations,” the filing read, as quoted by reports.

The breach caused Clorox an estimated $380 million in damages, comprising more than $49 million in recovery expenses and substantial revenue losses from halted shipments and widespread product shortages on retail shelves, the lawsuit claimed.

Cognizant and Clorox signed an agreement in 2013 about covering service desk and identity management.

Meanwhile, the IT major has announced its plan to set up a major campus here with an over Rs 1,500 crore investment, creating 8,000 jobs in three phases on a 22-acre site at Kapuluppada IT Hills.

Cognizant will begin operations by early 2026 from a temporary facility for 800 staff until Phase I of the permanent campus is ready by early 2029.

Its presence is expected to boost the regional digital economy, enhance tech skills, and benefit from Andhra Pradesh's infrastructure, business-friendly policies, and IT and Information Technology Enabled Services (ITES) sectors support.

The campus aims to build an inclusive, innovation-driven digital workforce and support Cognizant's global transformation delivery capabilities.

India remains central to Cognizant's operations, with more than 70 per cent of its 3,36,300 global associates based across various Indian delivery locations.