Microsoft Corp president Brad Smith wrote to Ukrainian President Volodymyr Zelenskiy last month with a clear message: Despite Kyiv’s calls for it to sever all ties with Russia, the US software behemoth would continue doing business in the country with non-sanctioned clients, including schools and hospitals.
“Depriving these institutions of software updates and services could put at risk the health and safety of innocent civilians, including children and the elderly,” Smith said in a letter dated March 14.
Smith told Zelenskiy that Microsoft was “mindful of the moral responsibility” to protect civilians. However, he said the company was discussing with US, British and EU governments whether “to halt any ongoing services and support” in Russia and would move “in lockstep with their sanctions and other economic goals.”
Asked about the exchange, spokespeople for Microsoft and Ukraine said a constructive dialogue was underway about actions to support the country.
The decision by some leading Western business technology makers — including Microsoft, German software multinational SAP SE and US giant IBM Corp — to maintain operations or staff in Russia despite Ukraine’s appeals have angered their workers in several countries.
Small groups of employees at Microsoft, SAP and IBM have called for management to withdraw fully from Russia in the wake of its invasion of Ukraine, according to comments seen by Reuters on internal discussion forums and interviews with 18 workers familiar with the companies, who sought anonymity because they were not authorized to speak publicly.
The employees, echoing Ukrainian officials, have urged the companies to go beyond ending new sales and dropping sanctioned clients in order to increase economic pressure on Moscow. They want their companies to suspend every deal in Russia, including for software that clients could use to track sales, supply chains and workforces.
Asked about the internal criticism, IBM said it has ceased working with Russian companies everywhere in the world, although it has stopped short of layoffs or suspending support of foreign businesses in Russia.
SAP said it was complying with government actions and even going beyond them, and would “welcome new sanctions currently under discussion.”
SAP responded to Ukraine’s requests to cut all ties in Russia with a previously undisclosed letter last month to Zelenskiy — reviewed in part by Reuters — saying that it was supporting essential Russian services, including “hospitals, civilian infrastructure and food supply chains.”
The three companies have not ruled out further pullback, but for now their employees in Russia are getting paid and accessing workplace tools, colleagues said. Local phone numbers are active for all three, Reuters confirmed.
Questioned about the demands on Western technology businesses from their own workers and the Ukrainian government to leave Russia, a Kremlin spokesperson said that “some companies are leaving, others are staying. New ones will come in their place.”
The spokesperson noted that companies had legal obligations to employees that must be fulfilled, such as paying wages.
Russian prosecutors have reportedly warned some Western businesses that their staff could face arrests if production of essential goods is stopped. The Wall Street Journal named IBM among those warned.
The Kremlin spokesperson denied the reports about pressure on companies from prosecutors.
“The part about arrests is a lie,” the official said.
UKRAINIAN LOBBYING
Ukrainian First Vice Prime Minister and Minister of Digital Transformation Mykhailo Fedorov, one of the leading campaigners for a digital blockade, said that Russia was already feeling the impact as some technology companies exit, such as developers of digital payment and Web development tools.
However, he is pushing for a complete departure.
“We will keep trying until those companies have made the decision to leave Russia,” he said.
Fedorov’s team said last month that a “huge number” of Russian organizations have contracts for SAP’s software, including major banking and energy companies. Reuters could not independently confirm SAP’s customers in Russia, and SAP said it was in full compliance with sanctions.
Mirroring the Ukrainian government’s message, SAP’s five salespeople for Ukraine told regional managers on a March 18 call that the company must end support for remaining Russian clients, a person familiar with the discussion said.
Fedorov wrote on Twitter on March 25, citing a conversation with SAP CEO Christian Klein, that the company would “gradually stop supporting” products in Russia. A day earlier, SAP had said it was shutting its Russian cloud business, which two sources described as a small operation.
In a March 23 letter sent to customers in Russia, SAP asked cloud clients to advise whether their data in the Russian cloud should be deleted, handed back to them or moved outside the country.
SAP confirmed the content of the letter, and said that Fedorov and Klein spoke.
At IBM, hundreds of workers criticized the company’s response to Russia’s invasion, three people with knowledge of internal messages said.
CEO Arvind Krishna on a March 2 call with employees had taken no sides on the war, one of the sources said. In a now-public message to workers the previous day, IBM had referred to what it described as the “deteriorating situation involving Ukraine and Russia.”
One comment on an internal discussion forum called on the CEO to read a book on IBM’s work during the Holocaust describing how the company designed punch-card machines that Nazi Germany used to track Jewish people.
“Think carefully and do the right thing — pull IBM and IBMer’s in Russia out of Russia,” the employee wrote.
Responding to the outcry, Krishna announced on March 3 a suspension of sales in Russia and condemned “the Russian war in Ukraine.” On March 7, he went further, saying that IBM had suspended “all business” in Russia without elaborating.
An IBM spokesperson told Reuters on March 24 that the business suspension meant the company is no longer providing “goods, parts, software, services, consulting and technology” anywhere in the world to Russian clients.
Several Microsoft workers on internal chat tools have also demanded the company to exit Russia altogether, with some even telling senior management they would quit otherwise, an employee said.
BOYCOTT DOUBTS
Some workers said they have not joined the calls for full exits due to doubts over harming civilians. They also question how strong an impact the companies’ withdrawal from Russia would have.
For instance, the US on Feb. 24 sanctioned Russian Railways, a state-owned company operating passenger and freight trains. IBM that day placed the company on its “Denied Parties List” and stopped tech support, a March 5 IBM letter to Fedorov said.
Denied parties cannot access official replacement discs, adapters and memory for mainframes that a former IBM salesperson said need swapping every two years.
However, a person familiar with operations at Russian Railways said it can run for years without aid.
SAP also said that because some clients have its software installed on their machines, they can keep using it regardless of the company’s decision not to provide support.
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