Microsoft unit in Russia to file for bankruptcy: Report

A subsidiary of Microsoft Corporation in Russia is set to file for bankruptcy, according to a recent report by Reuters.

Earlier this week, Russian President Vladimir Putin said that foreign service providers like Microsoft and Zoom should be "throttled" in Russia to make way for domestic software solutions, states the report.

The filing concerns Microsoft Rus LLC, which has served as one of the company's operating entities in Russia. It remains unclear what implications the bankruptcy will have on Microsoft's other registered units in the country, which include Microsoft Development Centre Rus, Microsoft Mobile Rus, and Microsoft Payments Rus, according to the Reuters report.

The bankruptcy declaration appears to be part of the broader trend of Western technology firms curtailing their presence in Russia, following the Ukraine-Russia conflict in February 2022. 

Although Microsoft initially continued offering some core services after the invasion, the company announced in June 2022 that it would be significantly scaling back its operations in Russia, citing the altered economic outlook and the strain on its business environment, as per the report.

Following the Ukraine-Russia conflict, Microsoft took steps to distance itself from Russian state-affiliated media, including removing RT's mobile applications from its Windows App Store and suspending advertisements tied to Russian state-backed news organisations.

Earlier in 2022, Google's Russian subsidiary filed for bankruptcy, citing the freezing of its bank accounts by Russian authorities, which rendered it unable to continue basic business functions, including paying local staff, suppliers, and contractors.