The Industries Removing Their Services From Russia
The past three weeks have been a whirlwind of fear, stress and emotion as Russia invaded Ukraine. For the Russian people, life has changed drastically as some of the world’s biggest brands have begun to pull out of Russia, cease operations or, in TikTok’s case, ban Russian users from the platform altogether. There have been some massively high profile arguments and users have boycotted brands in an attempt to get them to leave the Russian market. What’s becoming clear is that every single sector has been affected by Putin’s war.
The Removal of Social Media
One of the first industries that implemented early changes was in the tech and social media spaces. Apple was one of the first companies to pull out of Russia – the tech giant started by refusing to ship any more products to the country. Before the stock ran out, Apple announced that they would close all Apple stores in the country. Alongside this, the sanctions put in place by Western governments led the Russian Ruble crashing in value which meant that the price of the iPhone more than doubled overnight.
Social media has caused huge problems for the Kremlin who usually prefers to keep a tight lid on the information that citizens are allowed to access. Platforms like Twitter and TikTok have provided the opportunity for Russians to see the same images as the rest of the world, rather than state propaganda which prompted Russians to protest the war. The government brought in a new false information act and used this to shut down any independent journalism sources, as well as block Facebook, Twitter and Instagram. TikTok was the last platform left for Russians to access real news, but TikTok announced that they were blocking the service from being accessed in Russia. It was a controversial move as this was the last method that Russians could access real news, but many critics have pointed out that they left before they were blocked.
How This Affected The Financial Industry
Some of the biggest hardships have been seen in the financial sector. The UK government announced that they would block 3 of Russia’s biggest banks from using Great British Pounds as well as announcing the withdrawal of SWIFT from Russia which allows citizens to make international payments. Arguably the biggest dent to the Russian economy was the announcement that MasterCard and Visa would pull out of the country. The exit of the two biggest payment giants in the country meant that Russian cards wouldn’t work outside of Russia, and cards issues anywhere else in the world wouldn’t work in Russia. With the economy entirely crippled the Ruble tumbled in value, making it almost worthless which made it difficult for foreign companies to operate in the country.
Foreign financial firms have found it particularly difficult to operate which has resulted in them exiting the Russian economy, even without public pressure to do so.
iGaming in Russia
888 Russia was one of the biggest betting and casino companies to operate in Russia, but shortly after the wave of sanctions were announced 888 decided to exit the market. While very little has been said about their exit, other than citing moral grounds, there are a few reasons why 888 could no longer operate in Russia.
First of all, the tumbling value of the Ruble meant that Russians who previously had a lot of disposable income were now unable to make ends meet as the price of everyday essentials that were imported skyrocketed – this was also caused by many companies choosing to no longer serve Russia. With the new value of the Ruble and inflated prices of goods in the country, there were very few people who could afford to place bets which meant that 888 was no longer profitable.
On top of this, the extreme sanctions had made it very difficult to get money out of the country – any methods that remained were subject to severely increased fees. All of this amounted to 888 preferring to save face by leaving the country than continue to struggle as their profit tumbled.
There is a long list of financial institutions that have pulled out of Russia, alongside huge brands from many other industries. 888 is the only foreign betting company to operate in Russia which means there isn’t much data on the industry as a whole, but it’s easy to imagine that they’re struggling
Other Sectors Taking a Stand
It’s not just operators suspending operations there either – software studios, the developers who would provide games for an online casino, have also been withdrawing their services from Russia or withdrawing from contracts working with Russian employees/freelancers. Russia, in general, is well known for its passion and knowledge in the design and computing sector so this is likely to be a big blow for those that are involved in the industry. We have yet to see what effect this might have on things like smartphones, casinos and other places that rely on software development to progress but if we have long periods of time where any involvement with Russian talent is removed then we are likely to see some effects later down the line.
It isn’t just entertainment and finances that have seen changes within Russia over the last couple of weeks. Recently McDonald’s announced that they would be closing doors on every single one of their restaurants throughout the country whilst the conflict is ongoing and they are unlikely to be the last one to do this. There are definite calls for international companies to remove their services from Russia. Although this is likely to be an unpopular decision amongst Russian citizens; it is hoped that their dissatisfaction will cause them to put pressure on their Government to end this conflict sooner rather than later.
As the conflict goes on and more companies feel pressure put upon them it is likely we’ll see more closing of doors and removal of services within the country, but it remains to be seen the long term effect this will have.