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IBM Begins Laying Off Entire Russian Workforce

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(Photo: Carson Masterson/Unsplash)The ongoing war in Ukraine has caused hundreds of companies to announce they were suspending operations in Russia. Some companies have even decided to pull out completely. Such is the case with IBM, which announced this week it has begun the process of laying off all of its Russian employees. The layoffs come in the wake of the company’s March 7th announcement that it was suspending operations there. As of press time, the company’s Russian website was already offline.

News of the impending layoffs ends months of uncertainty for the IBM workforce. According to a memo from the company’s Chairman and CEO, Arvind Krishna, it’s been monitoring the situation in Ukraine closely to ensure the safety of its employees. At the same time, it’s been considering its future business plans in the region. In the memo he stated, “As the consequences of the war continue to mount and uncertainty about its long-term ramifications grows, we have now made the decision to carry out an orderly wind-down of IBM’s business in Russia.” In May Krishna told Reuters the company would resume operations only once Russia ended the war in Ukraine. He said there would also need to be reparations for the harm it caused. Those two things obviously never happened.

IBM Chairman and CEO, Arvind Krishna. (Image: IBM)

The mass layoff process is set to begin immediately, but since it’s described as “orderly” it could take several months. IBM reportedly has several hundred employees in Russia. Krishna had previously told Reuters it wasn’t sure how long it would be able to keep paying its Russian employees while still being in compliance with crippling sanctions. The sanctions have limited the number of banks foreign companies were able to use to pay employees. IBM’s operations in the country were also responsible for just a fraction of its total income. According to Tadviser, the Russian office pulled in around $300 million annually. That represents just 0.5 percent of IBM’s $57 billion global revenue.

Though IBM is one of the first massive technology firm to pull out of Russia entirely, it likely won’t be the last. Just last month Google announced it was declaring bankruptcy in the country. This was due to Russian authorities seizing its bank accounts there, according to PCMag. Google said the seizure made it impossible to pay its employees and vendors, but it has not announced a complete withdrawal. In March Intel also announced it was joining the list of 600 companies that had suspended operations with Russia.

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