IBM starts laying off employees in Russia, three months after suspending operations in the country

IBM has begun the process of laying off all its staff in Russia, three months after it suspended operations in the country following the invasion of Ukraine. The company says the “orderly” wind-down is the next natural step and that it will continue to stand by and support the local workforce.

Like many major tech firms, IBM suspended its business operations in Russia soon after the country invaded its neighbor. Since then, the company has been paying its Russia-based employees, but chairman and CEO Arvind Krishna last month warned that tightening sanctions on Russian banks were making it more difficult to keep workers on the payroll.

In a post on IBM’s newsroom announcing the layoffs, Krishna wrote: “This process will commence today and result in the separation of our local workforce. Our colleagues in Russia have, through no fault of their own, endured months of stress and uncertainty.”

It appears that IBM’s Russian website has been removed, too.

Russia accounted for only a tiny amount of IBM’s overall revenue: around 0.5%, or $300 million, of the company’s $57.4 billion total. Rival HP, in contrast, says stopping sales in Russia and Belarus will cost it $1 billion in lost sales annually.

Krishna said that IBM would take all reasonable steps to support its Russia-based workers and make the transition as orderly as possible.

With IBM, Intel, AMD, and others pulling out of Russia, and Taiwan restricting its exported chips to those under 25 MHz, the country has been pouring money into its own microelectronics industry in the hope of ramping up production using its current 90nm node and manufacturing 28nm chips by 2030. It could turn to China’s Zhaoxin x86 chips, but they are of little use beyond office work.