IBM ends Russian operations, laying off staff

IBM started on Tuesday lay off the staff in Russia, a step followed by freezing operations in the country earlier this year.

Sanctions are among the prime reasons for IBM’s decision to exit Russia, according to a letter obtained by Reuters sent by IBM CEO Arvind Krishna to staff cites.

“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 said.

IBM’s Russian website is not available anymore. IBM was one of the long lists of companies that discontinued operations in Russia, after the beginning of the war in Ukraine in February. Big Blue didn’t stop salaried its employees. They are not at fault and don’t deserve to suffer because of sanctions against the Russian government, Krishna last month said.

Krishna added that IBM’s potential to get Russian employees salaried could be at risk, as the gradual progression of sanctions mean its payroll capabilities in Russia may disappear.

Moreover, this decision of IBM led to $300 million as total loss in revenues in Q1 2022, which it overcame easily. It beats analyst estimates to fetch home $14.2 billion in revenue for the quarter and profits of $622 million.

IBM announced that the earnings were driven by double-digit growth in the company’s software and consulting businesses. Losses of Russia are fairly standard across much of the tech sector till now.

IBM hasn’t even been the largest loser. HP, which stated a total exit from Russia last week. It affirmed it stands to lose $1 billion in sales because it is discontinued selling products in Russia and Belarus.

Furthermore, Adobe added that its Russia exit would cost it $75 million in revenue. UiPath stated losing $15 million. Cisco informed losing $200 million in sales down the tubes. Schneider Electric transferred its Russian operations to local management and lost $315 million.

According to Reuters data in March the company’s LinkedIn page indicated it had more than 1,000 Russian employees. The spokesperson told the news service that Big Blue only had “several hundred” employees in the country.

“… 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, standing by the Russian employees.