In a memo on Tuesday, IBM CEO Arvind Krishna announced that he would "orderly reduce" his business in Russia In fact, after the outbreak of the conflict between Russia and Ukraine, IBM joined other Western companies as early as March this year, freezing its business operations in Russia, but still paying salaries to local employees.
(from IBM newsroom)
Unfortunately, according to Reuters report last month - with the escalation of US sanctions against Russian banks, IBM is becoming increasingly difficult to pay the salaries of local employees.
Until now, the company was finally forced to terminate all employment in Russia. Arvind Krishna mentioned in the memorandum that the process will begin today.
The layoff will lead to the forced separation between IBM and the local labor force. Our colleagues in Russia have been under pressure and uncertainty for months, but their fault is not their fault.
Despite this difficult decision, I still want to assure them that IBM will continue to take all reasonable and compliant ways to support it so that it can make an orderly transition.
Arvind Krishna
In addition, at the Q1 earnings conference call in April, Jim Kavanaugh, chief financial officer, told investors that giving up his business in Russia would have a negligible impact on his profits.
Data show that the Russian market accounted for only about 0.5% of IBM's total revenue of US $57.4 billion last year (equivalent to US $300million).
As for IBM's major customers in the local market, they mainly include federal bank, energy and railway companies. In 2019, the company even held a think summit technology summit in Moscow.
Think summit 2021 data chart
However, since March, IBM has stopped providing business support such as commodities, parts, software services and technical consulting to local enterprises.
At the end of the memo, Arvind Krishna once again thanked employees everywhere for all they had done to help the company, customers and communities survive the crisis.
At the same time, the company is still united and looks forward to the Russian Ukrainian conflict on the right track to restore peace as soon as possible.