International Business Machines Corp.’s suspension of its Russian operations is costing the tech giant some highly profitable business.
In 2021, IBM generated about $300 million in revenue in the country, Chief Financial Officer Jim Kavanaugh said Tuesday on the company’s earnings call, noting that the business was concentrated in high-end infrastructure and software. He estimated the business contributed about $200 million to 2021 profit.
Following Russia’s invasion of Ukraine, IBM suspended operations in that country, including technical support to existing Russian clients.
Mykhailo Fedorov, Ukraine’s minister of Digital Transformation, had called out IBM on Twitter, saying its office in Russia remained open.
The company responded, also on Twitter, that the business suspension was “comprehensive, and covers all new and existing business with Russian clients, including for consulting services.”
IBM also offers relocation help and other assistance to employees in both countries, Mr. Kavanaugh said, adding the company continues to pay the roughly 500 employees it had in Russia and about 40 in Ukraine.
One initiative, for example, connects Ukrainian IBM employees and contractors fleeing the country with IBM colleagues in the region who can offer lodging, transportation and other assistance for them and their families.