December 4, 2022

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The Russian tech giant wants out of the country as the Ukraine war rages on

The Russian tech giant wants out of the country as the Ukraine war rages on

  • Yandex, Russia’s largest tech giant, wants to sever ties with the country, according to The New York Times.
  • Yandex’s parent company has concerns about the impact of the Ukraine war on its business.
  • An exit could deal a blow to President Putin as he focuses his efforts on domestic technology and goods.

Russia would lose its largest technology company, which would throw a dent on President Putin’s plans to promote Russian alternatives to Western technology.

yandex, It is often referred to as Google’s Russia, is the country’s largest online company known for its browser search and transfer apps. But the Netherlands-based parent company wants out of Russia because of the potential negative impact of the Ukrainian invasion on its business, according to New York Times report. The exit of Russia’s biggest tech giant would deal a blow to President Vladimir Putin, who has made a concerted effort to produce Russian technology and goods as sanctions cut off access to Western suppliers.

As part of a larger restructuring plan first reported By Russian media outlet The Bell, Yandex’s parent company (called Yandex NV) will move its new business and promising technologies — including self-driving cars, machine learning and cloud computing services — out of Russia, The Times reported, citing two anonymous sources on the website. Familiarity with the subject. These companies will need access to Western markets, experts and technology, all of which are unworkable while the Russian invasion of Ukraine rages on and Western sanctions remain in place.

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However, the decision to transfer Yandex’s fledgling technology business may not be up to the parent company. The Times reported that the company would have to obtain Kremlin approval to transfer licenses of patented Russian technology out of the country. In addition, Yandex shareholders will have to agree to a broader restructuring plan.

Russia’s tech sector is taking a beating amid the Ukraine war

Yandex’s business, once It has been hailed as a rare Russian business success story, struggled since the invasion of Ukraine. The tech giant’s story is not unlike the one in Silicon Valley. Yandex employed more than 18,000 people, was worth more than $31 billion, and is often referred to as the “Google of Russia.” He. She It even has offices In downtown Palo Alto, California, sometime.

But since the Russian invasion of Ukraine, thousands of Yandex employees have left Russia, and the New York-listed company’s stock price Lost more than 20 billion dollars in value almost immediately after the war, before Nasdaq stopped trading in its shares. Meanwhile, Moscow-listed Yandex shares have fallen 62% in the past year.

Yandex’s misfortune mirrors other Russian tech companies, which have struggled in the face of Western sanctions and the displacement of tens of thousands of Russian IT workers, according to a Russian newspaper. Al Jazeera report. It’s something not even Putin can deny, acknowledging that Russia’s IT sector will face “enormous” difficulties because the United States and 37 other countries restrict Russia’s access to technologies, such as semiconductors and telecommunications equipment, via export controls.

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Dismantling Russia’s dependence on the global economy has been an uphill battle for the country, even before the Ukraine invasion and its sanctions.

in 2015, The Kremlin tried to stop All government agencies prohibit the use of foreign software, but by 2019 only 10% of software used by the country was Russian-made. Nor does Russia rely solely on foreign technology. More than half, or 65%, of Russian companies relied on imports for their manufacturing, according to a 2021 note from the Russian Central Bank. From cars to office paperMost companies have foreign suppliers somewhere in the supply chain.