IBM starts laying off its Operations in Russia

According to a memo released today by CEO Arvind Krishna, IBM will begin an "orderly" contraction of its business in Russia. The company shut down its business in the country in March and joined the wave of other Western companies that chose to stop selling following the invasion of Ukraine or withdraw completely from Russia.

IBM is no longer operating in Russia, but IBM continued to pay its Russian-based employees. However, US sanctions on Russian banks make it difficult for the company to pay Russian-based employees.

The company told investors that not doing business with Russia would have little impact on earnings. "Russia is a very subordinate part of IBM," said Jim Kavanaugh, the company's chief financial officer, in a statement of earnings for the first quarter of April. Russia accounted for about 0.5% of IBM's total revenue last year or $300 million in total revenue of $57.4 billion.

IBM has many prominent clients in Russia, including federal banks, energy companies, and Russian Railways. The company previously held a Think Summit in Moscow in 2019, focusing on many Russian customers. However, according to Reuters, the company has stopped providing "goods, parts, software, services, consulting and technology" to Russian companies since March.