IBM Closes Down Russian Operation, Lays Off Staff

After suspending its operations in Russia in Q1, IBM tells local staff it is winding down operations in Russia and laying off employees

IBM has told its Russian workforce that it is carrying out an “orderly wind-down of its business in Russia, and has begun laying off local staff.

Big Blue in March suspended all of its operations in Russia, as did Microsoft, Oracle and SAP. Since then, many tech firms, such as SAP and others, completely closed down their Russian operations.

IBM until now however continued to suspend its operations, and still employed its Russian staff there, amounting to more than 1,000 workers according to LinkedIn data.


Russia exit

But the writing was on the wall for IBM’s Russian workforce, after CEO Arvind Krishna in May said he was unsure how long the company can continue paying the staff in Russia, due to the increasing sanctions against the pariah nation.

Now Reuters obtained a letter from Arvind Krishna sent to IBM Russian staff last week, which citied sanctions as one of the prime reasons for the decision to exit Russia.

He confirmed that IBM is ending all work in the country and has begun laying off staff.

“As the consequences of the war continue to mount and uncertainty about its long-term ramifications grows, we have now made the decision to carry out an orderly wind-down of IBM’s business in Russia,” Krishna reportedly wrote to employees.

“Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty… I want to assure them that IBM will continue to stand by them and take all reasonable steps to provide support and make their transition as orderly as possible,” Krishna wrote.

An IBM spokesman told Reuters there were several hundred employees in Russia.

Big Blue also had an office in Moscow, which is likely now closed permanently.

As of Wednesday afternoon, the dedicated IBM Russian website is no longer available.

Other exits

Russia’s invasion of Ukraine has brought worldwide condemnation and some of the most severe and wide ranging sanctions ever seen, that includes much of the tech industry.

IBM is not the only tech firm completely pulling out of Russia.

Nokia has indefinitely suspending its business in the country, and there are reports that Microsoft is making ‘substantial cuts to its business in Russia’.

Computer giant HP, which in February had suspended its operations and shipments to Russia, announced last week during its quarterly earnings call that it will cease all operations in Russia.

“Considering the current environment and long-term outlook for Russia, we have decided to stop our Russia activity and have begun the process of fully winding down our operations there.”

A statement from HP says the company employs about 200 people in Russia and that the company is “committed to supporting them during this process.”

“We’re … thinking about the people of Ukraine,” said CEO Enrique Lores. “More than three months into the war with Russia, the devastation and suffering across Ukraine is difficult to comprehend… we continue to mobilize resources to support (the people of Ukraine).”