IBM Starts ‘Orderly Wind-Down’ Of Russia Business

IBM is starting what CEO Arvind Krishna is calling an orderly wind-down of IBM’s business in Russia.

The move, unveiled Tuesday in a letter originally sent on May 30 to IBM employees, comes after Big Blue’s first move in March to suspend operations in Russia because of Russia’s war on Ukraine.

Russia in fiscal 2021 contributed about $300 million of revenue, and about $200 million of profit and cash, said James Kavanaugh, IBM senior vice president and chief financial

officer, on April 19 during IBM’s first fiscal quarter 2022 financial analyst conference call. Kavanaugh said at the time that IBM expects no contribution from Russia in fiscal 2022.

[Related: Arvind Krishna’s IBM Think Keynote: ‘We Are Open To Partnerships’ ]

IBM joins several high-profile technology companies in shutting down operations in Russia including HP Inc., Hewlett Packard Enterprise, SAP, DXC Technology, Accenture and others.

Krishna, in his letter to IBM employees, wrote that since the company suspended operations in Russia, it has been focused on the safety and security of its employees in the country and evaluating longer-term options while continuing to pay those employees.

“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. We see this move as both right and necessary, and a natural next step following our business suspension,” he wrote.

The shut-down process started May 30, and it means the separation of its Russian workforce, Krishna wrote.

“Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty. We recognize 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. … We remain united in our hope for an end to this war and the restoration of peace,” he wrote.