Technology giants in Silicon Valley are joining the rest of the business world in withdrawing their products and services from Russia. Companies such as Apple (AAPL) have severed ties with the Russian market altogether to protest the Ukrainian invasion, while companies such as YouTube (GOOG, GOOGL), Meta (FB) and Microsoft (MSFT) are restricting Russian propaganda networks such as RT and Sputnik in Europe.
And while Big Tech’s moves have put at least some pressure on Russian President Vladimir Putin and provided assistance to Ukrainian citizens, they can also be a boon to the companies’ end results. And for companies embroiled in controversy, taking action against Russia could improve their reputation among consumers.
“We want to think it’s altruistic and companies take a stand, but sometimes it’s a wash of value,” Forrester senior analyst Alla Valente told Yahoo Finance. “In other words, if a brand has had bad media or publicity, they could do so to try to repair their brand reputation.”
More benefit than harm
Among the major technology brands, Apple has the strongest position against Russia. The company stopped all sales of products in the country, restricted services such as Apple Pay, removed the RT and Sputnik applications from the App Store everywhere except Russia, and deactivated live traffic and incidents on Apple Maps to prevent Russia from seeing where it could Ukrainian citizens gather.
MOSCOW, RUSSIA – MARCH 2, 2022: Re: Store in the GUM department store. As of March 2, all re: Store stores in Moscow have been closed as Apple suspends all product sales in Russia. Artyom Geodakyan / TASS (Photo by Artyom Geodakyan \ TASS via Getty Images)
Apple has no physical stores in Russia, which means that its products are sold through third-party retailers. And according to Wedbush analyst Dan Ives, Russia’s suspension of hardware sales will not affect Apple’s end result much.
“Russia as a whole is a breadwinner in terms of its financial impact on American technology giants,” Ives told Yahoo Finance. “If the FAANG names pulled the plug from doing business in Russia, that’s a maximum of 1% -2% of total revenue exposure.”
Apple has long turned human rights into one of the cornerstones of its appeal, even if it is sometimes detrimental. He was notoriously opposed to the Department of Justice when investigators asked Apple to create an iOS backdoor to gain access to an iPhone used by one of the killers in the 2015 San Bernardino terrorist attack.
The story continues
Apple protested the request, saying that building a backdoor would create a vulnerability in any iPhone on Earth that hackers could quickly find and exploit.
“They are a brand that has drawn a line in the sand about what they stand for and what they don’t,” Valente said. “And when you’re guided by these types of outlines, it makes … you see more clearly the path you have to take.”
Of course, Apple, along with other technology giants, does not have a perfect experience. The company sells and manufactures its products in China, which has been accused of human rights abuses, including the closure of Uighurs in Xinjiang concentration camps.
In general, brands with Ukraine need to benefit from the positive attention they receive, and they could attract new customers who choose which companies to do business with based on their morale.
Big Tech’s moves will keep employees, attract talent
In addition to keeping customers satisfied, the actions of technology companies against Russia can also raise the morale of their employees and serve as a powerful tool for recruiting for future employees.
Employee activism is a major force in Silicon Valley, forcing companies like Google to distance themselves from certain military contracts. Companies certainly recognize this and want to ensure that they keep their employees happy by supporting Ukraine.
“Think about whether you have senior people, important people, or certain talents who say, ‘You know, we as employees are no longer in line with the brand we work for, and we’re going to leave.'” I mean, it could be a huge problem for technology companies, “Valente said.
It’s not just about current employees. Technology companies need to ensure that they are on the right side of the conflict if they want to continue to attract the best talent, especially at a time when there are more jobs than workers available.
Technology companies are almost certainly taking a stand against Russia because their leaders believe it is the right thing to do in the face of an unprovoked invasion. However, they probably realize that this has tangible benefits for themselves.
However, it will be more interesting to see which companies continue to hold their ground if the war drags on for months or years, and whether they will feel the same then as they do now.
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Do you have any advice? Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.