IBM completely shuts down its Russian operations

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Arvind Krishna, IBM

Tech giant to start laying off Russian-based employees immediately

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Arvind Krishna, IBM. Image: Shutterstock via Dennis


IMB will begin an “orderly” liquidation of its Russian business, according to a memo publicly released by CEO Arvind Krishna.

The tech giant suspended operations in the country in March following the invasion of Ukraine, but continued to keep Russian-based employees on the payroll.

Now, however, as the conflict closes in on nearly six months and Western governments increase pressure on Russian leaders through new sanctions, IBM has decided to pull out of the country altogether. US sanctions on Russian banks may have been a key part of his decision, though Krishna said it was a “natural next step” after the suspension of its activities.

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So, from June 8, 2022, IBM will start laying off its Russian-based workforce.

“This process will begin today and will result in the separation of our local workforce,” Krishna wrote in the memo. “Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty. We recognize this is difficult news, and I want to assure them that IBM will continue to support them and take all reasonable steps to provide assistance and make their transition as orderly as possible.

IBM’s Russian operation has attracted business from various of the country’s largest industries, such as federal banks, energy companies and also its railways. IBM had also held its Think Summit in Moscow in 2019. However, along with a wave of other Western companies, IBM stopped selling and providing services in March.

Financially, the decision to sever ties with Russia will have very little impact on IBM’s results, according to its chief financial officer, Jim Kavanaugh. In an earnings call in April, he told investors that “Russia is a very minimal part of IBM” and only made up about 0.5% of IBM’s total revenue. in 2021, or about $300 million of its total revenue of $57.4 billion.

© Dennis Publishing


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