February 22, 2024

Vision Cim

Thank Business Its Friday

Tech Giants IBM and Microsoft Lay Off Hundreds of Employees in Russia

Tech Giants IBM and Microsoft Lay Off Hundreds of Employees in Russia

  • IBM is shutting down operations in Russia, while Microsoft is scaling down in the country.
  • Each of the companies is laying off hundreds of local employees.
  • Businesses are exiting or shrinking businesses in Russia after the country’s invasion of Ukraine.

Tech giants IBM and Microsoft are laying off hundreds of employees in Russia as companies continue to leave or scale down businesses in the country.

IBM suspended its Russian operations in March after the country invaded Ukraine, but employees were kept on the payroll. In a memo to staff on Tuesday, chairman and CEO Arvind Krishna announced an “orderly wind-down” of business in Russia. The local workforce will be laid off, he said.

“Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty,” said Krishna. “We recognize that this news is difficult, and 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,” he continued.

IBM did not immediately respond to Insider’s request for comment but told Reuters it employs several hundred people in Russia.

Krishna said during IBM’s first-quarter earnings call in April that the company’s business in Russia is “not large” and concentrated on high-end infrastructure and software, according to an official copy of his remarks.

Microsoft, meanwhile, is significantly scaling down its business in Russia, a company spokesperson told Insider on Thursday. Microsoft suspended new sales and services in Russia in March, but is still servicing existing customers. 

“As a result of the changes to the economic outlook and the impact on our business in Russia, we have made the decision to significantly scale down our operations in Russia,” the Microsoft spokesperson told Insider. “We will continue to fulfill our existing contractual obligations with Russian customers while the suspension of new sales remains in effect.”

Microsoft is laying off 400 employees in Russia, a spokesperson told Bloomberg, which first reported the news.

“We are working closely with impacted employees to ensure they are treated with respect and have our full support during this difficult time,” the tech giant told Insider.

Microsoft and IBM now number among the major US and European companies — including Goldman Sachs, McDonald’s, and Disney — that have announced they’d be ending their operations in Russia.