Microsoft initiates bankruptcy proceedings

(MENAFN) A Russian branch of Microsoft has indicated its intention to initiate bankruptcy proceedings, as noted in a recent entry on the national registry. This decision aligns with Microsoft's earlier move to withdraw from the Russian market following the intensification of the Ukraine conflict.

Back in March 2022, Microsoft ceased the sale of its offerings in Russia and suspended various business operations to adhere to Western-imposed sanctions targeting Moscow in response to the Ukraine situation.

Following Microsoft's departure, several major Russian companies, such as Severstal, Uralkali, VTB, MegaFon, and Gazprombank, have initiated legal actions against its Russian subsidiary, Microsoft Rus. These lawsuits, centered on alleged contract breaches post-exit, collectively seek approximately 341 million rubles (around USD3.6 million dollars).

Soon after halting its Russian operations, Microsoft discontinued the renewal of Microsoft 365 subscriptions for business clients, affecting services like Outlook, Teams, Office, OneDrive, as well as SharePoint. Additionally, it severed access for various Russian entities to cloud platforms including Visio Online, Project Online, and Power BI, among other imposed limitations.

Data indicates that in the previous year, Microsoft's Russian branch generated revenues of 161.6 million rubles (close to $2 million) and achieved a net profit of 174.1 million rubles (approximately USD2.13 million dollars). This contrasts sharply with 2021 figures, where the subsidiary reported earnings of 6.9 billion rubles (USD84.5 million dollars) and profits of 638.1 million rubles (USD7.8 million dollars), marking its final complete year before exiting the Russian market.

At the beginning of the year, Microsoft secured the trademark 'Microsoft Places' with Russia's patent authority. The registration suggests intentions to offer or permit temporary use of software solutions focused on hybrid planning, workplace coordination, office space oversight, and similar applications through 2023.

Over the past few months, several international companies such as McDonald’s, Hyundai, Intel, LG, IKEA, Chanel, Rolex, and Louis Vuitton, which had earlier withdrawn from Russia, have started filing new trademark applications domestically, indicating possible plans to re-enter the market.

Recently, President Vladimir Putin advocated for establishing a framework to facilitate the return of foreign businesses to Russia, stating it should proceed "but only insofar as it aligns with the protection of our own business interests." During discussions with industry leaders at the Kremlin, he stressed that Moscow would not be "rolling out a red carpet" for companies like McDonald’s and others seeking re-entry.

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