(Bloomberg) — Ericsson AB said it had suspended business with customers in Russia “indefinitely,” extending a halt from February that was originally billed as temporary, following sanctions imposed as a result of Russia’s war in Ukraine.
Roughly 600 staff in Russia will be placed on paid leave, said the Swedish telecommunication equipment maker, major supplier to Russia’s largest operator MTS and fourth largest operator Tele2. It’s also booking a provision of 0.9 billion kronor ($95 million) in the first quarter for impairment of assets and other exceptional costs. Roughly a third of that impacts cash flow.
“Indefinitely means until further notice,” an Ericsson spokesperson said in response to emailed questions, adding that last year, its combined sales in Russia and Ukraine amounted to less than 2% of its global sales. Staff there are employed in support functions.
The company, scheduled to report its quarterly results on Thursday, is overhauling its compliance function after revelations were made of alleged payments to terror group ISIS in Iraq and a statement by the U.S. Department of Justice that Ericsson failed to make adequate disclosures about its operations in Iraq before entering a deferred prosecution agreement in 2019.
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