IBM to wind down Russian operations completely

IMB will start an "orderly" wind-down of its business in Russia, according to a publicly-released memo from CEO Arvind Krishna.

The tech giant suspended its operations in the country in March following the invasion of Ukraine but has continued to keep Russian-based employees on the payroll.

Now, however, with the conflict closing in on almost half a year, and Western governments increasing pressure on Russian leaders through more sanctions, IBM has decided to pull out of the country completely. US sanctions on Russian banks may well have been a key element in its decision, though Krishna said it was a "natural next step" following its business suspension.

As such, from 8 June 2022, IBM will begin terminating the employment of its Russian-based workforce.

"This process will commence today and result in the separation of our local workforce," Krishna wrote in the memo. "Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty. We recognise 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's Russian operation brought in business from a variety of the country's biggest industries, such as federal banks, energy firms and also its railways. IBM had also held its Think Summit in Moscow back in 2019. However, along with a wave of other Western companies, IBM stopped selling and providing its services in March.

Financially the decision to cut ties with Russia will have very little impact on IBM's bottom line, according to its head of finance, Jim Kavanaugh. During an earnings call in April, he told investors that "Russia is a very de minimis part of IBM" and that it only accounted for roughly 0.5% of IBM's total revenue in 2021 - around $300 million out of its total revenue of $57.4 billion.