New Delhi: Shalev Hulio, the co-founder of notorious spyware maker NSO Group will step down as CEO and the Israeli company will lay off a seventh of its employees in the latest round of upheaval after its flagship Pegasus cyberweapon has come under increasing scrutiny.

According to several media reports, NSO is laying off 100 of its 700 employees and Hulio will be replaced by current COO Yaron Shohat. Israeli news website Calcalist reported that Hulio will remain at the company and take charge of mergers and acquisitions. "As part of this new role, Hulio will be responsible for helping the company find a new owner. As the new CEO, Shohat is in charge of implementing the company’s reorganization process, including the layoffs," the report says.

The development was separately confirmed by news agency Reuters, which added that Shohat would lead the company untill the board appoints a new CEO.

Though earlier reports said that NSO was on its last legs, Calcalist claimed that the company will end 2022 with revenue of around $150 million.

NSO has been mired in controversy since July last year, when a consortium of international media organisations – including The Wire – uncovered widespread abuse of the company's Pegasus spyware. Though the company had claimed that the military-grade spyware – sold only to "vetted governments" – is used to target criminal and terrorist networks, the Pegasus Project showed that journalists, dissidents and civil society members were targeted by several governments across the world, including India.

Subsequently, the US government placed the company on a trade blacklist. NSO is also facing legal action from Big Tech companies like Apple and Meta. Apple said in its lawsuit that NSO violated US laws by breaking into the software installed on iPhones.

In a statement to Calcalist, NSO confirmed that the company will be "implementing a cutback and reorganisation program in order to adjust itself to the challenges ahead", adding that 100 employees will be laid off and Hulio will step down as CEO.

Hulio is the second CEO to step down in less than a year. Itzik Benbenisti resigned from his post on November 11, 2021, only two weeks after he was appointed. The decision was taken after the company was blacklisted by the United States Department of Commerce.

In January this year, Asher Levy stepped down as chairman of NSO days after reports published in Israel claimed that the country’s police had used Pegasus against citizens. However, he claimed that his departure was planned months ago and was unconnected to the recent events.

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