Nokia to ‘exit’ Russia as Huawei reportedly stops work

Letter-writing and the old-fashioned telegraph could stage a comeback in Russia. Just a day after Ericsson said it would suspend its business there “indefinitely,” Finnish rival Nokia has gone even further, revealing plans this morning to exit the Russia market. Amid reports that China’s Huawei is also suspending Russia activities and furloughing staff, local networks may effectively have nowhere left to turn.

While both the Nordic vendors had already halted deliveries to Russian customers to comply with recent US sanctions, they had continued to maintain some Russian operations. In Nokia’s case, that included research and development (R&D) facilities, raising the possibility that products sold to Western clients were developed partly inside Russia. In an age of cyberattacks, that is likely to have provoked unease.

Those facilities and jobs will now be moved outside Russia, according to a Nokia statement issued this morning. Nokia had previously revealed to Light Reading that it employs about 800 people in Russia – out of an international workforce comprising 87,927 people last year – and generates about 2% of its revenues there, meaning roughly €450 million ($489 million) in 2021.

It does not expect the decision to affect this year’s financial targets but will incur a €100 million ($109 million) cost in the first quarter. That is not dissimilar to the $95 million provision that Ericsson announced yesterday when it said it would indefinitely suspend work and put Russia-based staff on paid leave.

Full exit, in time

The Finnish vendor plans a complete withdrawal from the Russian market, Light Reading has learned, meaning all 800 jobs there will ultimately disappear or be transferred outside Russia. This will not happen quickly, though. In its statement, the Finnish vendor says it has applied for licenses to continue supporting Russian networks so that modern-day communications systems do not simply vanish for ordinary Russians overnight. This, it reasonably points out, would restrict information flows to Russians and make life even harder for people caught up in Vladimir Putin’s war. At the same time, Nokia wants to ensure any redundancies are as painless as possible for affected staff.

To read the complete article, visit Light Reading.