The parent company of Russia’s most prominent technology company, Yandex, wants to sever ties with the state to protect its new business from fallout from the war in Ukraine, a potential setback for President Vladimir Putin’s efforts to develop home-grown alternatives to high-quality drugs. Western technological goods and services hampered by sanctions.
In an overhaul, Dutch holding company Yandex — often referred to as “Google’s Russia” — will move its most promising new technology to markets outside Russia and sell its existing businesses in the country, including a popular web browser, food delivery service and taxi calling apps, According to two people familiar with the matter who have not spoken publicly due to the sensitivity of the discussions.
The company’s plan is to protect itself from its home market, and highlights the stifling effect of Western sanctions on Russia’s once thriving tech sector.
The people familiar with the matter said the war in Ukraine has made development of new Yandex technologies — such as self-driving cars, machine learning and cloud services — unviable. Someone added that such companies, which require access to Western markets, experts and technology, will fail if they remain linked to Russia.
The second person familiar with the matter said Yandex’s Russian subsidiary will continue to offer the same products in the country under the new owners.
state of war
- focal point: The The Ukrainian army is on the offensive, and the Russians are on the defensive. But with nearly a fifth of its territory still occupied by Russian forces, Ukraine has a long way to go.
- Russian missile barrage: The wave of Russian missile strikes on Ukraine’s basic services caused power outages in hospital operating rooms and cut electricity and running water in cities.
- Dnipro River: A volunteer team of Ukrainian special forces conducts secret raids under cover of darkness, traveling through the strategic waterway that has become the dividing line of the Southern Front.
- visual investigation: Videos circulating on social media have fueled a debate about whether Ukrainian forces committed war crimes or acted in self-defense while trying to capture a group of Russian soldiers who were then killed. Here’s what we know.
It’s not clear if Yandex’s plan will go forward. One person said the company must obtain Kremlin approval to transfer licenses for technology registered in Russia out of the country. It will also need to find buyers, most likely within Russia, for its business, and a comprehensive restructuring plan will need approval from Yandex shareholders.
Yandex’s plan is backed by Alexei Kudrin, the Russian government’s chief auditor and a longtime confidant of Mr. Putin. Mr. Kudrin, one of the remaining prominent economic liberals in the Russian government, works for the company unofficially, but is expected to play a management role in the future.
Mr. Kudrin is expected to meet with Mr. Putin this week to discuss the future of Yandex and other topics, said one of the people familiar with the matter. Kremlin spokesman Dmitry S. Peskov, on Thursday, said he had no information about such a meeting.
Yandex declined to comment. The Russian Audit Bureau, Mr. Kudrin’s employer, did not respond to a request for comment.
The company’s restructuring plan was first reported by Russian business media, The Bell.
Western efforts to isolate Russia economically after its invasion of Ukraine destroyed the once thriving company. The price of Yandex shares traded in Moscow has fallen by 62 percent in the past year. Shares of the New York-listed company lost more than $20 billion in value before the Nasdaq Stock Exchange suspended trading after Russia’s invasion of Ukraine in February.
Thousands of Yandex employees, more than 18,000 employees, have left Russia since the beginning of the invasion. In March, the company’s executive vice president at the time, Tigran Khodaverdyan, defied the Kremlin’s line by calling it a “brutal war” in a Facebook post.
To distance itself from the war’s political fallout, Yandex in August sold its online news aggregator, which has become riddled with government propaganda due to Russia’s increasingly draconian media laws banning criticism of the war.
The European Union imposed sanctions on Mr. Khodaverdyan in March for Yandex’s role in promoting the Kremlin’s war narrative. His boss, the founder of the Israel-based company, Arkady Voloz, was sanctioned by the bloc several months later. They both resigned from the company to allow it to continue working in Europe.