NSO Group’s Hulio steps down as CEO of spyware firm, 100 employees let go

Producer of controversial Pegasus phone hacking software undergoes large scale reorganization amid bid to regroup after years of negative publicity, blacklists and lawsuits

A photographic illustration shows a mobile phone near the NSO Group company logo in the Israeli city of Netanya on February 9, 2022. (JACK GUEZ / AFP)
A photographic illustration shows a mobile phone near the NSO Group company logo in the Israeli city of Netanya on February 9, 2022. (JACK GUEZ / AFP)

The chief executive of embattled Israeli spyware maker NSO is stepping down and 100 employees are being let go as part of a reorganization process, the company said Sunday.

In a statement, NSO said that CEO Shalev Hulio, one of the company’s founders, would be stepping down. Yaron Shohat, the company’s chief operating officer, will lead the firm on an interim basis and manage the reorganization process.

Hulio, who led the firm as it battled years of negative publicity that transformed the Herzliya-based outfit into an internationally recognized pariah, will remain with the company overseeing its mergers and acquisitions arm.

A statement from NSO said the reorganization will examine “all aspects of its business, including streamlining its operations to ensure NSO remains one of the world’s leading high-tech cyber intelligence companies, focusing on NATO-member countries.”

A company official, speaking on condition of anonymity because they were not authorized to discuss the reorganization efforts, said that 100 employees, or roughly 13 percent of NSO’s work force, would be dismissed.

Although the company keeps its client list private, governments and spy agencies around the world have sought its Pegasus software, which allows users to activate the microphone and camera on private devices without their knowledge.

NSO has been connected to a number of scandals resulting from alleged misuse of its surveillance software. Last year, the US government blacklisted the company, saying its tools had been used to “conduct transnational repression.”

Since then, NSO has been lobbying to have itself removed from the blacklist, investing “hundreds of thousands” of dollars into the publicity campaign according to a ProPublica report.

NSO reportedly tried to get the issue on the agenda for the meeting between Prime Minister Yair Lapid and US President Joe Biden in Jerusalem in July.

NSO Group CEO Shalev Hulio speaks with the Calcalist paper, April 20, 2020. (YouTube screenshot)

Azerbaijan, Bahrain, Kazakhstan, Mexico, Morocco, Rwanda, Saudi Arabia, Hungary, India, and the United Arab Emirates were all said to have purchased the NSO Group’s Pegasus program to target activists, political dissidents, and journalists, allegedly including Morocco targeting French President Emmanuel Macron.

It was also reportedly used to track journalist Jamal Khashoggi, who was subsequently murdered by Saudi intelligence agents. NSO has denied allegations of wrongdoing.

The company says that Pegasus is sold only to foreign governments, after approval by Israel’s Defense Ministry, as a tool for catching criminals and terrorists.

It says it has safeguards in place to prevent abuse, but critics say these safeguards do not go far enough, and NSO has acknowledged it cannot control whom its clients monitor. It says it does not have access to information that is collected.

Critics, including human rights groups and outside researchers, say customers have abused Pegasus to keep tabs on journalists, rights activists, and political dissidents from Mexico to Saudi Arabia to the West Bank.

NSO does not identify its clients. But the company has acknowledged cutting off at least seven customers for abusing its technology. These reportedly have included authorities in the United Arab Emirates, Saudi Arabia and Mexico.

NSO also faces lawsuits from Apple and Facebook accusing the Israeli firm of breaking into their products.

The US Commerce Department’s decision to add NSO to its “entity list” has hurt the company by limiting its access to US components and technology. NSO is challenging the designation.

The company has also been hurt by an Israeli decision late last year to tighten its supervision of cyber exports. That decision, made in the wake of criticism that Israel’s oversight of the digital surveillance industry was too lax, has reduced the number of countries that can purchase Israeli cyber software from more than 100 to 37.

Times of Israel staff contributed to this report. 

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