Tech giant Microsoft’s Russian subsidiary files for BANKRUPTCY

• Microsoft’s Russian subsidiary, Microsoft Rus LLC, filed for bankruptcy in late May – marking the company’s full exit from Russia after a phased withdrawal that began in 2022.
• The filing followed a court order to repay Gazprombank for undelivered services under a 2021-2022 contract.
• Microsoft had already closed its Russian offices and scaled back operations due to economic uncertainties, though it maintained a legal presence until 2025.
• Russia’s push for “digital sovereignty” and restrictions on foreign tech services, coupled with sanctions and corporate boycotts, have forced Western firms like Microsoft and Google to exit.
• The departure underscores Russia’s declining tech sector, with businesses and consumers increasingly reliant on domestic alternatives amid geopolitical tensions.

The Russian subsidiary of Big Tech company Microsoft has filed for bankruptcy, marking the latest retreat of a major American corporation from the country.

Microsoft Rus LLC filed a bankruptcy notice with the Russian Unified Federal Registry of Bankrupt Declarations (Fedresurs) on Friday, May 30. According to a report by Ukrainska Pravda, the subsidiary is also preparing a bankruptcy filing at the Moscow Arbitration Court following that of Fedresurs.

The filing followed a court order issued to the subsidiary to repay Russian financial giant Gazprombank. Russia’s third-largest bank took Microsoft Rus LLC to court, alleging that the tech firm failed to deliver services despite receiving payment.

Gazprombank sought bid to recover 90.9 million Russian rubles ($1.17 million) under a contract valid from September 2021 to September 2022. The court ordered the subsidiary to pay back around $949,000, including unjust enrichment and interest.

According to the Russian TASS news agency, Microsoft Rus LLC is the company’s primary legal entity in Russia. The tech firm headquartered in the U.S. state of Washington maintains three other entities in Russia – Microsoft Development Centre Rus, Microsoft Mobile Rus and Microsoft Payments Rus. The operational status for the three remain unclear, however.

Putin’s digital iron curtain forces Microsoft’s Russia exit

Microsoft Rus LLC’s bankruptcy filing comes months after the parent company shuttered its remaining offices across 13 Russian cities. This completed a phased withdrawal that began after Moscow’s February 2022 special military operation in Ukraine.

The bankruptcy filing underscores the mounting challenges for multinational firms operating in Russia, where President Vladimir Putin has openly called for throttling foreign tech services to bolster domestic alternatives. Microsoft had already scaled back operations in June 2022, citing economic uncertainties and business disruptions, but maintained a legal presence until late 2024. Despite reporting a net profit of 174.1 million rubles ($2.25 million), its revenue dropped from 6.9 billion rubles ($89 million) in 2021 to 161.6 million rubles ($2.09 million)

Microsoft’s exit mirrors the fate of other Western tech giants in Russia. Google’s local subsidiary filed for bankruptcy in 2022 after authorities seized its bank account, crippling its ability to pay employees and vendors. (Related: Google, Apple cut off access to ordinary Russians, meaning they can do the same to Americans at any time.)

The Kremlin’s push for “digital sovereignty” has intensified since the special military operation, with the Russian Ministry of Digital Development, Communications and Mass Media proposing restrictions on foreign cloud services where Russian alternatives exist. Microsoft has already begun cutting off Russian firms from its cloud platforms, including Power BI and Visio subscriptions.

The withdrawal highlights the broader unraveling of Russia’s once-thriving tech sector, as sanctions, corporate boycotts and state-mandated substitutions reshape the market. For Microsoft, the bankruptcy represents the final chapter in a decades-long presence in Russia – one that began during the post-Soviet economic liberalization, but ended under the weight of geopolitical strife.

As the last of its offices close and legal battles conclude, Microsoft’s departure signals a new era of technological decoupling. This leaves Russian businesses and consumers increasingly reliant on homegrown alternatives.

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Watch this video about Microsoft’s recent layoffs that affected 6,000 jobs.

This video is from the newsplusglobe channel on Brighteon.com.

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Sources include:

Reuters.com

Pravda.com.ua

TASS.com

Brighteon.com