The US companies Cisco Systems and Nike plan to fully exit Russia on Thursday, the two firms told Reuters on Thursday as the pace of Western firms departing accelerated. The company said that Cisco will end its business in Russia and Belarus. The sportswear maker said that Nike is making a full exit from Russia three months after suspending its operations there.
Foreign companies looking to leave Russia over the war in Ukraine face the prospect of a new law being passed in the coming weeks that will allow Moscow to seize assets and impose criminal penalties. It has encouraged businesses to accelerate their departure.
What is a trickle is becoming a torrent, according to Paul Musgrave, a political science professor at the University of Massachusetts, commenting on the latest round of companies that announced they would leave.
In March, Cisco suspended business operations in Russia.
We have now made the decision to begin an orderly wind-down of our business in Russia and Belarus, it said in an emailed statement on Thursday.
Earlier this month, Cisco's rival International Business Machines Corp began winding down its business in Russia and Microsoft said it was making substantial cuts to its Russian business.
Access to critical equipment is restricted for Russian businesses and households because of the withdrawal of top technology firms such as Cisco, IBM and Microsoft. They may have to depend on older equipment and domestic alternatives.
Cisco has offered a number of relocation options for its few hundred employees in those countries. The company did not disclose which countries the employees were offered as alternative locations.
Musgrave said companies heading for the exit may struggle to return. He said that this presents opportunities for domestic firms in some markets but also more for brands from China and elsewhere to make inroads.
On March 3 Nike said it would temporarily suspend operations at all its Nike-owned and operated stores in Russia. It has decided to leave now, it said.
Cisco and Nike are joining the likes of McDonald's and Renault in making complete exits from Russia. The law, which could be put in place within a few weeks, allows Russia to appoint administrators over companies owned by foreigners in countries that want to quit Russia because of Ukraine's economy.
In March, Nike's rival Adidas said it was shutting its Russian stores and suspending online sales.
Adidas has no plans to resume business in Russia, the German sportswear company told Reuters on Thursday.
The operation of Adidas' stores and Adidas' online retail in Russia continues to be suspended until further notice. This also applies to the delivery of goods to Russia, it said in an emailed statement.