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US tech firm physically destroyed inventory in Russia

Cisco decided to liquidate its equipment following its withdrawal from the sanctioned country

US software and network equipment manufacturer Cisco Systems destroyed its inventory in Russia worth more than $20 million this past January after exiting the sanctioned country last year, TASS news agency reported on Wednesday, citing the company’s accounting statement.  

According to the document, which was published on March 31, spare parts, “other property, including the IT equipment itself,” as well as vehicles, office furniture and appliances, and demonstration equipment were all destroyed.   

“Inventories were physically destroyed in January 2023, and in connection with this, as of December 31, 2022, the entire cost of inventories – 1,864,002 thousand rubles [$23.4 million] – was accrued with a depreciation provision,” the document says.  

Cisco terminated most of its contracts with its Russia-based employees, with the total amount of mandatory contributions and payments to staff reaching 190.6 million rubles ($2.3 million), according to the company’s financial report.  

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In June 2022, Cisco announced its withdrawal from Russia over the conflict in Ukraine. In August, the company made the decision to dispose of its stocks due to the termination of sales and suspension of licenses and services in the country, as well as owing to the inability to re-export, the company said.  

Media reports later surfaced that the firm could resume deliveries to Russia through an intermediary, with the Russian IT services company IBS named as a possible distributor. However, IBS denied carrying out any negotiations about importing equipment for Cisco. 

In light of Cisco’s exit from the country, Deputy Trade Minister Vasily Shpak said that Western companies that left Russia should not be given an easy path back to the market.   

He said that Russia should generate demand for domestically manufactured tech products with Russian software to help underpin achieving technological independence.

For more stories on economy & finance visit RT’s business section

April 05, 2023 at 08:30PM
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