IBM, Microsoft laying off hundreds of employees in Russia

IBM and Microsoft will lay off hundreds of employees in Russia as the tech giants reduce their footprints in the country in response to its invasion of Ukraine. 

IBM CEO Arvind Krishna told employees in a Tuesday memo that the company would carry out "an orderly wind-down" of its business in Russia. As a result, IBM's entire Russian workforce will be laid off.

"Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty," Krishna said. "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."

An IBM spokesperson told FOX Business that the company has "several hundred" employees in Russia. 

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Meanwhile, a spokesperson for Microsoft told FOX Business it would "significantly scale down" its Russia operations as a result of changes to its economic outlook and the impact on its business in Russia. 

"We will continue to fulfill our existing contractual obligations with Russian customers while the suspension of new sales remains in effect," the spokesperson added. "We are working closely with impacted employees to ensure they have our full support during this difficult time." 

Bloomberg reported that more than 400 Microsoft employees in Russia would be affected.

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IBM Chief Financial Officer Jim Kavanaugh said during the company's first-quarter earnings call in April that its Russia business is "not large" but "concentrated in high-end infrastructure and software."

"Last year, business in the country contributed about $300 million of revenue and about $200 million of profit and cash," he added. "For this year, we expect no contribution from Russia, which puts us closer to the low end of our free cash flow range."

Meanwhile, Microsoft Chief Financial Officer Amy Hood said on the company's third-quarter earnings call that Russia represents less than 1% of the company's total revenue. 

"We expect that it will decline significantly," Hood added.

Other companies that have exited Russia over the past several months include Goldman Sachs, JPMorgan Chase, Deutsche Bank, Starbucks, Siemens, Shell and McDonald's.