Ericsson entered into an agreement to sell its customer support business in Russia to a domestic company owned by the subsidiary’s former operational managers, as part of the vendor’s plan to exit the country.
It stated the transaction included the transfer of approximately 40 employees, and certain assets and contracts related to the business. Financial details were not disclosed.
The customer support unit is used for local business engagement and does not involve the export of hardware, software or related services to mobile operators in Russia, added Ericsson.
Following Russia’s invasion of Ukraine, Ericsson is one of many companies to announce plans to wind down operations [1] in the country, with it embarking on a phased exit plan originally due to complete by the end of 2022.
However in its latest update, Ericsson said it expects to have a small presence in Russia on a local business going into 2023.
“A legal entity owned by Ericsson will continue to be registered to complete the wind down and to fulfil legal, contractual and administrative requirements,” it explained.
Ericsson announced the indefinite suspension of business operations and deliveries to customers in April, and it has notified around 400 employees they will be laid-off.
US compliance extension
Separately, Ericsson announced agreed with the US Department of Justice and Securities and Exchange Commission to extend the terms of an independent compliance monitor for one more year to June 2024.
Ericsson agreed to a three-year compliance programme [2] in 2019 as part of a $1.1 billion settlement with US authorities to end a corruption investigation. The company admitted to shelling out millions in bribes and falsifying books between 2000 and 2016 in at least five countries.
With the independent compliance monitoring coming to an end, the company said it had agreed to an extension “to further embed best-in-class governance, risk management and compliance framework across the organisation”.
[1] https://www.mobileworldlive.com/featured-content/top-three/ericsson-notifies-russia-employees-of-layoffs/
[2] https://www.mobileworldlive.com/featured-content/home-banner/ericsson-pays-1-1b-to-settle-foreign-bribery-case/
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