Microsoft Scales Down Business in Russia, Affects 400 Employees

UTC by Ibukun Ogundare · 3 min read
Microsoft Scales Down Business in Russia, Affects 400 Employees
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About 400 employees are bound to lose their jobs as Microsoft concludes its operations in Russia.

American multinational technology company Microsoft Corporation (NASDAQ: MSFT) is about to become the latest company to exit Russia. Although, the company had previously suspended all sales in the country due to the war. The latest development is that Microsoft is significantly scaling down its business in Russia three months after the Ukraine invasion. Many tech behemoths have wound up their operations in Russia as a result of the war.

Microsoft Lays off 400 Employees as Company Exits Russia

In a statement to Bloomberg, Microsoft revealed the reason for the business scale down in Russia. The technology referred to the economic meltdown occurring as the war persisted.

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

Unfortunately, about 400 employees are bound to lose their jobs as Microsoft concludes its operations in Russia. However, the company said it is “working closely” with employees who are victims of the exit. Currently, there are no specifics on the number of the tech company’s employees in Russia.

It does not appear that the departure from Russia will have a significant effect on Microsoft. A few months ago, the company revealed that Russia accounted for less than 1% of its total revenue.

At after-hours trading, MSFT is trading up 0.5% to $270.54. The company stock has also gained more than 5% in the past year, adding another 5.90% over the past month. However, Microsoft stock has lost 19.60% since January, plunging further by over 5% in the last three months. In the last five days, the tech giant has dropped 1.52%.

More Companies Cut Ties with Russia

Before Microsoft announced scaling down its Russia business, other multinational companies like Apple Inc (NASDAQ: AAPL) had started cutting ties with the country. Other companies that have either suspended or halted relationships with Russia are Nike (NYSE: NKE), Adidas, Amazon (NASDAQ: AMZN), Dell, etc. Earlier in the week, tech company IBM (NYSE: IBM) said it is also winding down operations in Russia.

Microsoft is now exploring the metaverse by diverting its innovations into the virtual world. The company has launched a technology that permits workers to use its HoloLens on the floor to overlay digital images in the real world. Called Industrial Metaverse, the innovation is now used by a Japanese motorcycle manufacturer Kawasaki. A report from CNBC states that Kawasaki will use Microsoft’s technology to build robots in its factories.

Basically, Microsoft invented the Industrial Metaverse to enable efficiency and speed in product developments. The company’s corporate vice president of mixed reality, Jessica Hawk, commented:

“These are real-world problems that these companies are dealing with… so having a technology solution that can help unblock the supply chain challenge, for example, is incredibly impactful.”

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