IBM will begin a “orderly” winding down of its operations in Russia, according to a memo from CEO Arvind Krishna . The company suspended its business operations in the country in March, following the example of other Western companies that have chosen to either halt sales or withdraw from Russia entirely after its invasion of Ukraine.
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Even though it no longer operates in Russia, IBM has continued to pay employees who reside in the country. However, U.S. sanctions on Russian banks have made it more difficult for the company to pay its employees in the country, it said last month.
The closure means IBM will also terminate the employment of its Russia-based workforce. “This process will begin today and will result in the separation of our local workforce. Our colleagues in Russia, through no fault of their own, have 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 smooth as possible,” Krishna wrote in the note.
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The company told investors that no longer doing business with Russia would have a very small impact on its results. “Russia is a very de minimis part of IBM,” said Chief Financial Officer Jim Kavanaugh during a first-quarter earnings call in April. The country accounted for about 0.5 percent of IBM’s total revenue last year, or $300 million of its total revenue of $57.4 billion.
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IBM has several high-profile clients in Russia, including federal banks, energy companies and Russian Railways. The company even held its Think Summit in Moscow in 2019, where it highlighted its many Russian clients. However, as of March, the company has stopped providing “goods, parts, software, services, consulting and technology” to Russian companies.
