Microsoft Slashes Russia Operations, Axes 400 Staff

Bad news keeps coming for Vladimir Putin, with Microsoft becoming the latest technology giant to announce a further reduction of its already suspended business operation in Russia.

Bloomberg reported that Microsoft is ‘substantially reducing’ its business in Russia that will impact more than 400 local employees.

It comes on the same day it emerged that IBM is closing down its Russian operation and axing hundreds of staff, and Taiwan is banning most chip exports to Russia, furthering its tech shortages.

Scaling down

“As a result of the changes to the economic outlook and the impact on our business in Russia, we have made the decision to significantly scale down our operations in Russia,” the company said in an emailed statement, Bloomberg reported.

“We will continue to fulfill our existing contractual obligations with Russian customers while the suspension of new sales remains in effect,” it said.

Microsoft’s decision to make substantial cuts to its business in Russia, mirrors a number of other companies that are reducing their exposure or pulling out of the country altogether following Russia’s illegal invasion of Ukraine.

Microsoft however said it would fulfill its existing contractual obligations with Russian customers, while the suspension of new sales announced earlier in March remains in effect.

Bloomberg News said more than 400 employees will be affected.

SAP comparison

Microsoft’s decision to keep some part of its Russian operation ongoing in order to fulfil existing contractual obligations with Russian customers, and not opt for a complete withdraw like others, will be scrutinised in some quarters.

This was the same issue facing enterprise software giant SAP when it was considering moving from a suspension of its operations in Russia, to a complete withdraw from the country.

In April SAP confirmed a total withdrawal from the Russian market, and was not just halting sales to the pariah nation, impacting 1,200 of its staff in Russia.

This included closing down SAP’s cloud business in Russia and halting support operations for its business critical software.

SAP also said at the time that Russian companies would not have their contract renewed upon expiration of the current subscription term.

The German software giant also said it would transfer the data of Russian customers to them before exiting.