NSO Group, an Israeli spyware firm, is laying off 100 of its 750 employees. In addition, NSO CEO Shalev Hulio, one of the firm's three cofounders, will step down from his position to deal with convincing the US authorities to remove NSO from the Department of Commerce blacklist and to find a buyer for the spyware firm.

Hulio will be replaced by COO Yaron Shohat, who has also overseen the current cuts and the streamlining process.

This is not the first time that Hulio has stepped down as CEO. In November 2021, Isaac Benbenisti was appointed CEO to replace Hulio, but he quit after just two weeks because NSO was blacklisted by the US Department of Commerce, and Hulio was forced to resume his position to stabilize the company.

The company has been facing a crisis after it was blacklisted by the US last year for selling software to other countries, which had been used to "maliciously attack" government officials, journalists, businesses, activists, academics, and diplomatic personnel.

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It was the first time the US government targeted Israeli cyber firms, which are granted export permits by the Israeli Security Ministry.

NSO Group has been embroiled in a seemingly never-ending spate of extremely prominent controversies. Revelations that it sells its powerful Pegasus spyware to authoritarian regimes, that its products have been used to spy on journalists, activists, politicians, and even potentially world leaders, and accusations that it played a role in Jamal Khashoggi's death have put it at the center of international criticism.

After NSO was sanctioned, Israeli authorities debated whether the Israeli government should contact the Biden administration on the company's behalf.

Initially, Israeli authorities decided against it; however, this decision was reversed, and the Israeli government began pressuring the Biden administration on the subject.

"We told the U.S. that they can’t destroy NSO and that several bad clients don’t mean the company’s products and capabilities are no longer needed," a senior Israeli official told Axios.

The Israeli government also urged the Biden administration that before punishing NSO, it should have explained explicitly what needed to be remedied and given the corporation an opportunity to make the modifications.

NSO recruited two legal firms in the US to work on the blacklist problem independently of the Israeli government.

The attorneys filed an appeal with the Department of Commerce and requested a hearing, which has yet to take place.

According to an NSO representative, the correspondence will continue in writing. The White House is not intervening with the regulatory process in which NSO Group is appealing the listing decision, as per a US official.

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