Monday, 15 August 2022

Cisco joins exodus from Russia

by Harry Baldock, Total Telecom
Friday 24 June 22

The technology firm said that they will be fully withdrawing from both Russia and Belarus, having ceased operations in the country following the Russian invasion of Ukraine

When Russia illegally invaded Ukraine on the 24th of February earlier this year, international sanctions were swift and severe. Companies of all shapes and sizes quickly took measures to cease business. Western telecoms equipment providers were no exception, with both Nokia and Ericsson initially pausing shipments to Russia before confirming their withdrawal from the market entirely…

When Russia illegally invaded Ukraine on the 24th of February earlier this year, international sanctions were swift and severe. Companies of all shapes and sizes quickly took measures to cease business.

Western telecoms equipment providers were no exception, with both Nokia and Ericsson initially pausing shipments to Russia before confirming their withdrawal from the market entirely.  

Now, Cisco, which first announced it had suspended operations back in March, has said it too will exit the market completely, not only in Russia but also in its similarly sanctioned ally Belarus. 

“We have now made the decision to begin an orderly wind-down of our business in Russia and Belarus. We are focused on ensuring impacted employees in Russia and Belarus are treated with respect and have our support through this transition. Cisco remains committed to using all its resources to help our employees, the institutions and people of Ukraine, and our customers and partners during this challenging time,” said the company in a statement on their website. 

Cisco is among a handful of major Western companies that continue to ramp up their efforts to leave Russia in recent weeks. Major sportswear company Nike, for example, has also announced its exit from the Russian market this week, with Microsoft having also announced major cuts this month.  

However, leaving the country in an orderly fashion could soon be problematic. Last month, the Russian government passed a law that would allow them to seize control of assets from foreign companies looking to leave the market since the start of the war. Companies that produce essential goods and services that are leaving Russia “without obvious economic reasons” and “based on anti-Russian sentiment in Europe and the United States”, could find themselves forcibly nationalised.

The mechanisms for how exactly this process might work are as yet unclear. 

For now, however, it seems that Russia will still have options when it comes to telecoms communications equipment. Despite the exodus of a number of major players, some Chinese equipment providers, like Huawei and ZTE, seemingly continue to quietly do business in the country, though likely at a reduced level in order not to draw the ire of international sanctions themselves, particularly from the US. 

With the conflict in Ukraine showing no signs of slowing, the loss of Cisco represents yet another blow for the future of Russia’s telecoms industry, potentially causing deep technological divisions that could take decades to heal.
 

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