Ukraine-Russian Crisis

War: Tech Giant Aims to Cut Ties With Russia

Published

2 years ago

Nov 25, 2022.

A technology giant famously known as “Russia’s Google” have cut ties with Russia over Ukraine’s invasion.

EKO HOT BLOG reports that the parent firm of Russia’s most prominent technology company, Yandex, wants to cut ties with the country to shield its new businesses from the fallout of the war in Ukraine, a potential setback to President Vladimir Putin’s efforts to develop homegrown substitutes for high-tech Western goods and services that have been choked off by sanctions.

Under a sweeping overhaul, the Dutch holding company of Yandex — often referred to as “Russia’s Google” — would transfer its most promising new technologies to markets outside Russia and would sell its established businesses in the country, including a popular internet browser and food delivery and taxi-hailing apps, according to two people familiar with the matter who would not speak publicly because of the sensitivity of the discussions.

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The company’s plan aims to shield itself from its home market and highlights the stifling impact of Western sanctions on Russia’s once-thriving technology sector.

The people familiar with the matter said that the war in Ukraine has made the development of Yandex’s new technologies — such as self-driving cars, machine learning, and cloud services — unviable.

One added that businesses, which require access to Western markets, experts, and technology, would fail if they remained associated with Russia.

Yandex’s Russian subsidiary would continue offering the same products in the country under the new owners, said the second person familiar with the matter.

It is not clear whether Yandex’s plan will go forward. One of the people said that the company must obtain the Kremlin’s approval to transfer Russian-registered technology licenses outside the country.

It would also need to find buyers, most likely within Russia, for its businesses, and the overall restructuring plan would need to be approved by Yandex’s shareholders.

Yandex’s plan is backed by Aleksei Kudrin, Russia’s chief government auditor and a longtime confidant of Mr. Putin. Mr. Kudrin, one of the few prominent economic liberals left in the Russian government, is acting for the company informally but is expected to take a managerial role in the future.

Mr. Kudrin is expected to meet Mr. Putin this week to discuss Yandex’s future and other topics, said one of the people familiar with the matter.

The Kremlin’s spokesman, Dmitri S. Peskov, said on Thursday that he had no information about such a meeting.

Yandex declined to comment. Russia’s Audit Chamber, Mr. Kudrin’s employer, did not respond to a request for comment.

The company’s restructuring plan was first reported by the Russian economic media outlet The Bell.

Western efforts to isolate Russia economically after its invasion of Ukraine have devastated the once-thriving company.

The price of Yandex’s shares traded in Moscow has plunged 62 percent in the past year.

The company’s New York-listed shares lost more than $20 billion in value before the Nasdaq stock exchange suspended their trading after Russia’s invasion of Ukraine in February.

Thousands of Yandex’s more than 18,000 employees have left Russia since the start of the invasion. In March, the company’s deputy chief executive at the time, Tigran Khudaverdyan, defied the Kremlin line by calling it a “monstrous war” in a Facebook post.

To distance itself from the war’s political fallout, Yandex in August sold its online news aggregator, which had become filled with state propaganda because of increasingly draconian Russian media laws that bar criticism of the war.