IBM closing down Russian business, starts laying off workers

IBM is getting rid of its footprint in Russia amid the war in Ukraine, making it the latest American tech company to overhaul its work because of the war. 

IBM CEO Arvind Krishna said in an internal message to employees that the company would undertake an “orderly wind-down” of its business in Russia after previously suspending operations while paying Russian employees. Mr. Krishna said the growing toll of the war drove IBM’s decision. 

“This process will commence today and result in the separation of our local workforce,” Mr. Krishna said in the May 30 memo made public by IBM on Tuesday. “Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty. 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.”

IBM appeared to have more than 1,000 workers in Russia ahead of the layoffs, according to a Reuters analysis of LinkedIn data. The Russian business accounted for about $300 million of IBM’s total $57.4 billion in revenue last year, per Reuters. 

The exodus of American tech companies’ services from Russia amid the war in Ukraine is growing. Amazon suspended in March all shipments of retail products to customers in Russia, and Microsoft similarly stopped new sales in Russia in March.

Apple told CNET it also halted sales in March and Google has reportedly suspended its ads business for Russia while maintaining its search engine services. 

The news of IBM‘s layoffs likely did not come as a surprise to its Russian workforce. IBM told Reuters last month that it was not sure how much longer it would be able to pay its Russian employees because of growing sanctions. 

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