microsoft has joined the group of companies that cut ties with Russia due to the war with Ukraine. Although the technology company will not close completely as McDonalds did a few weeks ago, it will will minimize your operation. According to a report from BloombergMicrosoft will fulfill its existing contractual obligations to customers in that country.
“As a result of the changes in the economic outlook and the impact on our business in Russia, we have made the decision to significantly reduce our operations,” he stated. The closing of offices will leave more than 400 workers unemployedto whom he promised full support during difficult times.
Downsizing Microsoft’s operations was a step that would come sooner or later. While the conflict in Ukraine remains at a standstill, western companies have been forced to leave the country. In May it was announced that Google would leave Russia after the government of Vladimir Putin seized the bank account of its subsidiary in the country.
“The seizure by the Russian authorities of Google Russia’s bank account has made the operation of our office in Russia unsustainable,” said a company spokesman. The Western-imposed economic sanctions unleashed a fierce response from the Kremlinwho threatened that he could take control of companies that come from hostile countries.
Microsoft has always played by the rules of Russia
The case of Microsoft is different. Although the company suspended sales of products and services in Russia, maintains operations in the country. Brad Smith, president of the company, declared to be horrified and saddened by the war. Because of that he announced the suspension of sales of Xbox, Azure and Windows in Russia. At the time it was said that they would take additional measures to stop their business in the country.
But suspending sales and closing operations are two different monsters. Microsoft is one of the companies that for years has played with the Kremlin’s rules to avoid sanctions. After announcing a law that would force technology companies to share data with the Government, Microsoft declared that he would comply with any law that was adopted. The same It occurred when Russia forced data companies like Apple to store the information of Russian users in the country.
In accordance with Dan Howleyanalyst of Yahoo Finance, the statements against Russia give companies a boost to the perception they have among their consumers. Failure to do so puts them in the spotlight and makes them subject to criticism and boycott attempts.
Despite that, there are contractual obligations to fulfill and the business segment is one of the most important for Microsoft.