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Microsoft Makes an Important Decision About Russia

Software giant Microsoft, like other multinationals, faces the dilemma about Russia after the country invaded Ukraine: Stay or go?
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Microsoft  (MSFT)  continues its policy of small steps regarding Russia. 

From the first weeks of Russia's invasion of Ukraine, the software giant did not hesitate to make its position clear. especially after NATO and its allies imposed sanctions aimed to isolate Moscow from the global economy. Many Western companies and banks had pulled out of the country.

In March, Microsoft decided to suspend sales of its products and services in Russia. It also committed more than $35 million to support humanitarian assistance and relief efforts for Ukraine. 

The company also decided to donate part of the earnings related to the Fortnite game on its Xbox console. 

The company, co-founded by Bill Gates and Paul Allen, also decided to concentrate on Russian cyberattacks, which multiplied before and since the invasion, in particular against Ukrainian infrastructure and institutions.

On this specific point, Microsoft disrupted some of Strontium’s attacks on targets in Ukraine, the company announced in a blog post in April. Strontium is what Microsoft called a group connected to the GRU, the intelligence arm of the Russian military.  (Others often call the group Fancy Bear or APT28.)

Strontium was using infrastructure to target Ukrainian institutions, including media organizations. It was also, according to Microsoft, targeting government institutions and think tanks in the U.S. and the European Union. 

"Our support for Ukraine is steadfast," Brad Smith, vice chairman and president of the software giant, said in March. "We’ve increased our humanitarian aid, continue to detect and defend against cyber threats, provide disaster response, and connect millions through free Skype service."

Will Microsoft Soon Exit Russia?

Microsoft has just made a new decision, which this time is about the company's activity. The firm will considerably reduce its presence in Russia. More than 400 employees will be affected by this decision.

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"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," a spokesperson told TheStreet in an emailed statement.

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

The spokesperson added that the company is working "closely with impacted employees to ensure they have our full support during this difficult time." 

While Microsoft in March had decided not to sell new products and services in Russia, the company continued to support its customers and maintained its offices there. 

The new decision is a step toward a probable exit from the country. 

Russia's invasion of Ukraine, which began Feb. 24, has placed multinationals in an uncomfortable position. They are forced to take sides by highlighting the actions they are considering. 

The general public and the authorities largely want to see them take strong gestures and no longer limit their efforts to declarations of goodwill. The movements of tech groups are particularly monitored.

The German group SAP  (SAP)  has started to prepare an "orderly exit" from Russia.

"We are announcing further steps toward an orderly exit from our operations in Russia, where we have operated for more than 30 years and have built an excellent team," SAP said on April 19. "As we wind down our operations, we will focus on responsibly managing the impact on these employees."

Apple  (AAPL)  and IBM  (IBM)  have suspended their operations in the country. Fast-food titan McDonald's is leaving Russia.