Ukrainian War, Did Cisco Really Leave Russia?
Cisco collapses on the stock market: the quarterly report disappoints market expectations. Yet according to the Ukrainian press, the multinational continues its business in Russia despite the announcement of the withdrawal
Pressure is mounting on Cisco Systems.
Shares of the multinational active in high-tech services and products hit an 18-month low on Thursday after the company warned of persistent component shortages, worrying Wall Street about how exports could suffer from China's Covid restrictions. and the Ukrainian crisis.
The stock of the Californian company lost 14.3%, falling to the lowest level of the last year. As Radiocor reported, Cisco generated lower-than-expected revenues in the first quarter of 2022 and expects an unexpected drop in sales for the current period.
The San Jose, California-based company took a $ 200 million hit after it went out of business in Russia and Belarus last quarter.
In fact, on March 3, Cisco announced it is the suspension of commercial operations in Russia due to the invasion of Ukraine.
Yet this is not the case according to the investigation conducted by the Ukrainian blogger Anton Shvets and published by Euromaidanpress . About 20% of Russia's network infrastructure relies on equipment from this tech giant. Shvets called Cisco's official distributors in Russia who confirmed that Cisco equipment could be ordered in the country. Both supplies and maintenance of these equipment are continuing in Russia.
All the details.
THE QUARTERLY OF CISCO
From 1 January to 31 March 2022, Cisco recorded an adjusted profit of 87 cents, against the 86 expected, on revenues of 12.84 billion, against the 13.34 billion forecast by analysts. Revenues are in line with the results of a year earlier, while in the previous quarter they had grown by 6%. For the current quarter, the fourth of its fiscal year, Cisco expects adjusted profit of 76-84 cents and a decrease in revenue from a year earlier of 1-5.5%. Analysts expected forecasts for an adjusted profit of 92 cents on revenues of 13.87 billion, equal to + 6%. Cisco's stock has lost 23% since the beginning of the year.
WITHDRAWAL FROM RUSSIA (AND BELARUS)
Notably, third-quarter revenue suffered a $ 200 million loss due to the war in Ukraine.
And on March 3, Cisco announced that the company will stop all commercial operations in Russia and Belarus. Cisco CEO Chuck Robbins told staff in a letter that “Cisco is shutting down all business operations in Russia and Belarus and will continue to focus on supporting our Ukrainian employees, customers and partners by providing humanitarian aid and accelerating our efforts. to protect organizations in Ukraine from cyber threats. We are with Ukraine and we condemn this unjustified war ”.
WHAT EMERGES FROM THE INVESTIGATION BY EUROMAIDAN PRESS
In fact, that's not quite the case.
All the more or less complex network infrastructures in any serious company use Cisco solutions in Russia. The Russian payment system MIR, which Russia used after the decision to abandon Visa and Mastercard, is based on Cisco solutions. One of the largest Russian banks, Sberbank , also uses Cisco solutions in its data centers.
MAINTENANCE IN PROGRESS FOR THE APPERECCHIATURE
As emerges from the investigation by Euromaidan Press , the Ukrainian media's website in English, many websites of official Cisco distributors continue to function. For example, a message on the site cisco-russia.ru.com, one of Cisco's official representatives, explicitly confirms this fact: “Cisco Russia continues to work and support customers and partners. We are ready to select the equipment for your task and to provide technical advice. Verify the new supply conditions by telephone with the manager ".
This shows that the American company still keeps its equipment there. This is possible because it operates not only directly, but through a large network of resellers and distributors who continue to cooperate with Russian companies.
Euromaidan Press checked many websites of the company's official distributors and found that they continue to work. “It is not enough to refuse to sign new contracts in Russia. You need to stop supporting previously developed infrastructure, abandon projects that have started, and stop support and maintenance. And, above all, refrain from extending the contracts already signed ”explains the newspaper.
Therefore, the Cisco headquarters in Russia can be decommissioned, but it does not result in total disruption. According to the Ukrainian newspaper, “currently almost 20% of the entire Russian network infrastructure is based on Cisco equipment. If the company had actually withdrawn its business from Russia, the consequences for Putin's regime would have been immense ”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/guerra-ucraina-cisco-ha-lasciato-davvero-la-russia/ on Tue, 24 May 2022 07:13:52 +0000.