Cisco Wiped Out $23.5 Million of Unsold Gear During Exit From Russia

[T0@st]

According to news agencies residing within Russian territories, it has been widely reported that Cisco has destroyed an inventory of unsold equipment with a total worth of $23.5 million. TASS, a Kremlin-controlled news organization, has made reference to account statements provided by Cisco Systems (the remaining legal entity of the Cisco Group based within the Federation) - it reports that the equipment was "physically destroyed" in January 2023, post a termination of sales in Russia and Belarus. The financial statements outline the liquidation of "primarily spare parts," but the agency claims that Cisco engaged in the destruction of network hardware, demo units and office furniture.

Cisco was one of the first tech companies to withdraw from Russian territories, following the full-scale invasion of the Ukraine. Soon after the beginning of the conflict, Cisco Systems announced the cessation of its business dealings, starting with a stoppage of sales in March 2022. A June deadline was specified for a complete shutdown of operations. The company made a decision by August 2022 to dispose of unsold inventories located within affected territories - the necessary permits for re-export of goods had not been obtained. It is not clear whether U.S. sanctions (against Russia) played a part in influencing the North American tech company's decision to engage in a scorched earth policy and obliterate the physical remnants of stock plus premises in Russia and Belarus.



According to financial statements filed in the United States, as a result of ceasing its business dealings in Russian territories, Cisco has written off a grand total of $67 million worth of assets. This grand sum would account for a combination of destroyed inventory (comms. equipment, spare parts) and property (office furniture, vehicles), as well as the cost of personnel involved in the withdrawal process and processing of assets.



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[Pan]

Based.

 

[Dyatlov A]

This is when stupidity costs lots of money

 

[ZoneDymo]

good

 

[Shtb]

Statements by corporations/politicians/etc are not necessarily true (yes, i'm alluding to corrupt stunts).

 

[caroline!]

Covering up the backdoors huh

 

[Space Lynx]

Covering up the backdoors huh

I have to agree with something along these lines, because it doesn't make sense to me why you just wouldn't fly them out of the country to use in a different country.

 

[Pepamami]

This is when stupidity costs lots of money

Most Cisco hardware is super overpriced, coz its all about Software and Service/Support.
Some of it maybe even outdated/old.
So it depends, how they counted this value.

 

[lemonadesoda]

Unauditable tax write off. Nice.

In the meantime, local reps walk the equipment, if any, out the back door.

 

[regs]

Covering up the backdoors huh

Well, CISCO and Meraki are in fact managed by NSA and have been caught red hand while using back doors for accessing client networks for doing whatever they want.

 

[Daven]

From the article, it sounds like equipment already imported into Russia but not yet sold/delivered. Sanctions began and Cisco was unable to get permission to ship the equipment out of Russia or sell it in Russia. Therefore it was probably legally prudent to destroy it.

If this is the case, the equipment is just a casualty of infighting between super powers. Welcome to Earth, ya’ll!

 

[A Computer Guy]

Seems a little extreme to me. What they can't relocate inventory with trucks or something?

 

[bobsled]

Seems a little extreme to me. What they can't relocate inventory with trucks or something?

It's Cisco gear. At their retail price, this write-off would be equivalent to a Cisco 48 port PoE dual switch stack.

 

[Icon Charlie]

From the article, it sounds like equipment already imported into Russia but not yet sold/delivered. Sanctions began and Cisco was unable to get permission to ship the equipment out of Russia or sell it in Russia. Therefore it was probably legally prudent to destroy it.

If this is the case, the equipment is just a casualty of infighting between super powers. Welcome to Earth, ya’ll!

Well yes and because of the situation Cisco will be able to get a tax right off on it. So its not all bad for Cisco

However as I know from my contacts the Russians are hard up to the point of dismantling washing machines and/or other modern day appliances to scavenge for electronic components. Things are not working so well over there.

Now you can google this as this has been reported last year but I try to validate my information from multiple sources I can trust.

 

[Shihab]

I have to agree with something along these lines, because it doesn't make sense to me why you just wouldn't fly them out of the country to use in a different country.

Seems a little extreme to me. What they can't relocate inventory with trucks or something?

Russia is - by proxy - at war with everyone west of St Petersberg.
Everyone has been seizing or threatening to seize the other camp's stuff since this invasion has kicked off. Putin and co. have banned transporting and started seizing a long list of equipments back in March 2022.
You don't just let your enemy make free use of your products and IP.

 

[kondamin]

If Cisco was still being sold in the Russian federation it must have been to western entities active in the country.
no way they were being used for infrastructure in a country that started making their own chips since the early 2000s as US gear is stuffed with backdoors and spyware

 

[razaron]

I think that might be more than 10 firepowers

 

[ymbaja]

Yeah 23 million is nothing to Cisco. The more eyebrow raising note is that it was destroyed instead of being resold.

 

[ypsylon]

As it should be, leave that deranged tyranny nothing to feed upon.

Sadly same thing cannot be said about great many other companies which just handed the keys and on the way to the airport said: take it, its free stuff.

NOTE: Folks who say: why it wasn't resold, reexported, etc, etc. Russian market is now back to times of Stalin. Everything is centralized. You can't remove any assets out of the country, be it fiat currency (limit last time I know was maximum 10k$ per company). Currency control is absolute. Civilians are not allowed to exchange RUB to $ or Euro. Black market for Western currency is huge. People know very well that Ruble is worth nothing outside Russia, even considering artificially low currency exchange right now, but considering national debt in first quarter of 2023 was 95% of annual predicted debt this will go downhill sooner or later. Can't cheat the brutal economics, no matter how creative at fudge accountancy regime is (probably Mrs. Nabulina - CEO of Russian Central Bank is the only competent economist left in the country). On so-called Moscow stock exchange (MOEX) you can trade only internally and only on selected stocks and assets. At the height of limits (excluding monthly shutdown) only dozens of entities were allowed to "trade", all of them connected to military-industrial complex and food production. It's more open now, but still can't move assets away without Kremlin authorization no less, which is never going to happen.

 

[regs]

Civilians are not allowed to exchange RUB to $ or Euro. Black market for Western currency is huge.

Total fantasy.

You can't remove any assets out of the country, be it fiat currency

Untrue

On so-called Moscow stock exchange (MOEX) you can trade only internally and only on selected stocks and assets.

Unless foreign entity doesn't want to be traded. It's visa versa. Western countries practicing unlisting for competitors. That whole practice came from the west. And there isn't just MOEX.

but considering national debt in first quarter of 2023 was 95%

Pointing finger over a sky, again. It's 17% - $380 bln, record low in 15 years. Down $110 bln in 2022. $311 bln - long term. Only $69 bln short term. CBR reserves are $594 bln. Minfin reseves are $154 bln. Totaling at $748 bln.

 

[ADB1979]

Wow, that's pretty retarded