Ericsson, Nokia to wind down Russian operations by year end

STOCKHOLM/MOSCOW: Ericsson said on Monday it will gradually wind down business activities in Russia over the coming months, while its Finnish rival Nokia said it also plans to shutter most of its Russian business by the end of the year.

While Ericsson had suspended its business in Russia indefinitely in April, Nokia went a step further and said it would exit the country completely.

“By the end of the year, the vast majority of our employees in Russia will have moved on from Nokia, and we have vacated all of our offices,” a Nokia spokesperson said on Monday. “We will retain a formal presence in the country until the legal closure is completed.”

More and more Western companies are selling their Russian businesses after announcing suspensions of operations in the weeks after Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

Dell Technologies Inc said on Saturday it had ceased all Russian operations after closing its offices in mid-August.

Ericsson, which had put its employees on paid leave earlier this year, also recorded a 900 million crown ($95 million) provision in the first quarter for impairment of assets and other exceptional costs related to the move.

It has about 400 employees in Russia and said it would provide financial support to those affected.

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Nokia, which had about 2,000 employees in Russia, said its remaining activity in the country is related to limited maintenance of critical networks to fulfill its contractual and humanitarian obligations.

As Ericsson and Nokia fully exit Russia, the country’s mobile operators MTS and Tele2 will become more dependent on Chinese companies such as Huawei and ZTE.

MTS declined to comment. Tele2 did not immediately respond to requests for comment.

Russian daily Kommersant first reported Ericsson’s exit and said some of its support staff would move to a new firm that will be established by top managers in Russia. Ericsson did not comment on the new firm.