The Kyiv Independent recently reported that Dell Technologies announced the company’s plan for a complete withdrawal from Russia. This announcement follows the closure of Dell Technology offices in mid-August.
The company’s withdrawal follows Russia’s 2014 annexation of the Black Sea peninsula of Crimea and its February invasion of Ukraine. Initially, Dell suspended its sales in Ukraine and Russia, stating “it would monitor the situation to determine next steps.” Then, in mid-August, Dell Technologies closed its offices and “ceased all Russian operations.” [i]
This announcement follows the May seizure of nearly $11 million from Dell LLC by a Moscow Arbitration Court. The seizure was the result of the company “fail[ing] to provide paid-for services to a local system integrator.” IT systems integrator Talmer sued Dell after Dell refused to provide technical support services for VMWare as had been contracted. In addition to refusing services, Dell did not return the advance payments Talmer had made. [ii]
As news of Dell’s decision has spread, many have weighed in on the plan’s efficacy. Many seem to agree with one Reddit User, Duckfoot2021, who suggests assets must be quickly removed from Russia to prevent nationalization.
Nationalization means taking privately-owned assets and making them publicly owned by a state or government. One example of nationalization occurred when Fidel Castro took control of all American companies in Cuba, a critical element leading to the Cuban Embargo. The video below further details the effects of Cuba’s nationalizing of US businesses. [iii]
Dell is said to have 50 employees who will be laid off as of Aug. 30, 2022. Reports have indicated that “the vast majority of Dell’s R&D center specialists and support engineers in St Petersburg and Moscow have already received job offers with competitive pay from Russian producers.” On that note, the full-scale impact Dell’s withdrawal will have on Russia cannot entirely be determined. [iv]
References
[i] Calvin, Dell also leaves Russia and lays off all employees, (Aug. 28, 2022)
[ii] Bill Toulas, Dell, Apple, Netflix face lawsuits for pulling services out of Russia, (May 9, 2022)
[iii] NowThis World, The History of America’s Cuba Embargo, (Apr. 20, 2015)
[iv] Yahoo! News, Dell ceases all Russian operations after August offices closure, (Aug. 27, 2022)
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