CISCO SYSTEMS, INC.

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Cisco, Nike quit Russia, as pace of Western firms leaving speeds up

06/23/2022 | 12:21pm EDT

* Cisco, Nike join MacDonald's, Renault in quitting

* New Russian law may encourage more foreign firms to go

* 'Trickle is becoming a torrent,' says analyst

June 23 - U.S. companies Cisco Systems and Nike plan to fully exit Russia, the two firms told Reuters on Thursday, as the pace of Western firms departing accelerated.

Telecoms equipment maker Cisco will wind down its business in Russia and Belarus, the company said. Nike is making a full exit from Russia three months after suspending its operations there, the sportswear maker said.

Foreign companies seeking to exit Russia over the war in Ukraine face the prospect of a new law being passed in the coming weeks allowing Moscow to seize assets and impose criminal penalties. That has encouraged some businesses to accelerate their departure.

"What was a trickle is becoming a torrent", said Paul Musgrave, a political science professor at the University of Massachusetts, commenting on the latest round of companies announcing they would leave.

Cisco suspended business operations, including sales and services, in Russia in March.

"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.

The withdrawal of top technology firms such as Cisco, IBM and Microsoft limits access to critical equipment for Russian businesses and households. They may now have to depend on older equipment and domestic alternatives.

Cisco has offered relocation options to its few hundred employees in those countries, it said. The company did not disclose which countries the employees were offered as alternative locations.

RIVALS MAY BENEFIT

Companies heading for the exit may struggle to return, said Musgrave. "This presents opportunities for domestic firms in some markets but even more for brands from China and elsewhere to make inroads," he said.

Nike said on March 3 it would temporarily suspend operations at all its Nike-owned and operated stores in Russia. It has now decided to leave entirely, it said Thursday.

Cisco and Nike join the likes of McDonald's and Renault in making complete exits from Russia. More companies are expected to leave in the coming weeks ahead of the new law.

The law, which could be in place within weeks, allows Russia to appoint administrators over companies owned by foreigners in "unfriendly" countries, who want to quit Russia as the conflict with Ukraine drags down its economy.

Nike's rival Adidas said in March it was shutting its Russian stores and pausing online sales.

Adidas currently 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.

(Writing by Matt Scuffham and Richa Naidu; Editing by Edmund Blair)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ADIDAS AG -2.46% 169.1 Delayed Quote.-31.53%
CISCO SYSTEMS, INC. 0.11% 46.8 Delayed Quote.-26.20%
MCDONALD'S CORPORATION 0.22% 266.945 Delayed Quote.-0.66%
MICROSOFT CORPORATION -0.23% 291.325 Delayed Quote.-12.97%
NIKE, INC. -0.75% 117.15 Delayed Quote.-29.17%
RENAULT -2.49% 29.98 Real-time Quote.0.65%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) -2.83% 59.75 Delayed Quote.-17.96%
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Financials (USD)
Sales 2022 51 213 M - -
Net income 2022 11 803 M - -
Net cash 2022 12 642 M - -
P/E ratio 2022 16,6x
Yield 2022 3,20%
Capitalization 194 B 194 B -
EV / Sales 2022 3,53x
EV / Sales 2023 3,34x
Nbr of Employees 79 500
Free-Float 99,9%
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Charles H. Robbins Chairman & Chief Executive Officer
Richard Scott Herren Chief Financial Officer & Executive VP
Jacqueline Guichelaar Group Chief Information Officer & Senior VP
Kip Compton CTO, SVP, Strategy & Operations
Maria Martinez Chief Operating Officer & Executive Vice President
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