Microsoft Will Suspend All New Sales of Products and Services in Russia

(Bloomberg) -- Microsoft Corp. said it's suspending all new sales of products and services in Russia as it condemned the country's “unjustified, unprovoked and unlawful invasion” of Ukraine.

The U.S. tech giant also said it's working closely with governments of the U.S., European Union and U.K. and stopping many aspects of its business in Russia in compliance with coordinated sanctions rules.

“We will take additional steps as this situation continues to evolve,” Microsoft President Brad Smith said in a blog post on Friday.

Microsoft said its “single most impactful area of work almost certainly is the protection of Ukraine's cybersecurity.” The company will help officials in Ukraine defend against Russian attacks, such as a recent one against a major Ukrainian broadcaster. Earlier this week, Microsoft said it was removing the news apps of Russia's state-controlled news agency, RT, from its app store.

The EU, U.S. and U.K. have compiled an extensive list of sanctions in an effort to isolate the country, financially, economically and technologically, after its invasion of Ukraine last week. Beyond concerns about the war, operating in Russia has become challenging for outside companies, given the sanctions and a U.S. ban on transactions with the country's central bank. Besides Microsoft, several U.S. tech companies have pulled out of Russia in recent days.

Apple Inc. has halted sales of the iPhone and other popular products in Russia and removed the RT News and Sputnik News applications from App Stores outside the country. Alphabet Inc.'s YouTube said it will stop running advertisements on channels from Russian state-backed media and certain other accounts. Intel Corp. is suspending all shipments to customers in Russia and Belarus, which is allied with Russia.

Wedbush Securities analyst Dan Ives said he expects even more tech companies to “pull the plug on Russia by this weekend given the horrific atrocities seen coming out of Ukraine.”

In a note to investors on Friday, Ives said he expects the pullback to have a minimal impact on the U.S. tech industry, saying that even in a worst-case scenario, a wholesale retreat would amount to a 1% to 2% hit to revenue.

“This is a move the Street would gladly applaud given the heartbreaking Ukraine invasion by Russia that is playing out in front of the world's eyes,” Ives wrote.