Microsoft Russia has announced that it plans to file for bankruptcy

Microsoft Russia has announced that it plans to file for bankruptcy. It joins a list of other Western technology companies pulling out of the Russian market.

Geopolitical tensions are again affecting the technology industry as Microsoft is joining a list of other Western companies such as Google that are closing their Russian subsidiaries.

Microsoft Corp.’s Russian subsidiary, Microsoft Rus LLC, has announced that it will declare bankruptcy. The announcement was made through a notice published on the official Russian registry Fedresurs on Friday, May 30.

This decision seems like it was brought on by the ongoing pullback of Western technology companies from the Russian market, considering the escalating political tensions and economic isolation stemming from the war in Ukraine.

Microsoft’s Russia unit is on the brink

While Microsoft has not issued an official statement in response to inquiries, the notice signifies an end to the company’s already scaled-down presence in Russia. Over the last two years, the company has significantly reduced its presence in the country.

The notice came just days after the Russian President, Vladimir Putin, publicly criticized and suggested that foreign digital service providers like Microsoft and Zoom should be “throttled” in favor of domestically developed alternatives.

Microsoft was one of several Western technology giants that responded to Russia’s invasion of Ukraine in February 2022 by curtailing services and operations in the country. Initially, the company continued to provide essential services such as security updates and cloud support, but by June 2022, the company announced a substantial downsizing of its Russian operations due to the deteriorating economic environment and geopolitical instability.

After the announcement, the company removed the RT (formerly Russia Today) app from the Windows App Store and banned advertisements from Russian state-affiliated media.

The Fedresurs registry entry states that Microsoft Rus LLC is now proceeding with legal steps to enter bankruptcy, which would potentially dissolve its presence as a formal business entity in Russia. This is the pattern that other foreign companies exiting Russia have followed.

Russia’s TASS news agency noted that Microsoft operates three other affiliated entities in the country, namely: Microsoft Development Center Rus, Microsoft Mobile Rus, and Microsoft Payments Rus.

At this time, the status of these units remains unclear. Whether they will also initiate bankruptcy proceedings or attempt to continue operating under restricted conditions is yet to be seen.

Other companies exiting Russia

Earlier this week, President Vladimir Putin emphasized the need to wean Russia off Western digital tools, specifically naming Microsoft and Zoom.

While Russia’s “technological sovereignty” policy is not new, the pressure to use regulation to suppress foreign firms to prop up Russian-developed alternatives has grown since the war in Ukraine began.

In 2022, Google’s Russian subsidiary filed for bankruptcy after authorities froze its bank accounts, making it impossible for the company to pay local employees or fulfill obligations to suppliers.

Some foreign software continues to be used in Russia as of now and are often circulated through gray market channels or rebranded alternatives, but official policy increasingly favors domestic innovation, even at the cost of performance, reliability, or global integration.

Microsoft’s exit might accelerate Russia’s domestic innovation ambitions as sectors that relied on the company’s productivity tools, cloud services, and cybersecurity infrastructure will now be left empty handed.

Industry observers have noted that replicating the sophistication and integration of Microsoft’s ecosystem will be a significant challenge for Russian developers, at least in the short term.

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