Is Russia’s Largest Tech Company Too Big to Fail?

Still, the company strived for normalcy. When I talked to Boynton on the phone on March 8, he told me that “everyone is coping” as best they can at Yandex. A Moscow source in a position to know told me the company was planning a “big party” for its workers in celebration of International Women’s Day on March 8, always a major festivity in Russia.

And while the US and European governments were sanctioning other Russian business figures with Kremlin ties, Yandex executives were seemingly spared—that is, until March 15, when the EU slapped an asset freeze and travel ban on Khudaverdyan. The EU’s official journal cited Gershenzon’s post about Yandex “hiding information” and revealed that on February 24, the day Russia invaded Ukraine, the Yandex deputy CEO and other Russian business leaders had met with Putin at the Kremlin to discuss an action plan in the wake of Western sanctions. Khudaverdyan resigned immediately.


With the Russian economy in shreds and Putin rapidly closing anything left of a free internet, the tech-worker brain drain was becoming a frantic mass exodus. Thousands of those who could afford to were fleeing a country that was “flying into an abyss,” as one Russian tech executive told The Financial Times, escaping to Cyprus, Armenia, and beyond. Some 25,000 Russians had reportedly arrived in Georgia within the first two weeks of the invasion. For the many more left behind, including untold thousands of Yandex workers, there’s the very real prospect that the Russian economy and tech sector will be isolated for years or decades, leaving them without a livelihood.

One conceivable way for Yandex to protect and retain at least some of its workers might be to bring them from Moscow to Israel. The country has a bustling tech industry, and it does not appear to want to restrict Yandex’s business activities there. Israel might also be a base for Yandex’s bid to deepen its presence in the United Arab Emirates, with which Israel has friendly relations and which has so far not imposed sanctions on Russia. The Israeli newspaper Haaretz reported that Yandex had approached the government about bringing over 800 workers, but an Israeli foreign ministry spokesperson told me, “it seems no such requests were submitted by the company.”

The company could still stabilize in an increasingly isolated Russia, even if its global ambitions are dashed. With Apple Pay now shut off to some Russian customers, Yandex Pay could gain market share, and the same might go for other services where Yandex no longer faces foreign competition. A Chinese buyer might make an offer for parts of the company or even all of it. Alternatively, a Kremlin-controlled firm like Sberbank could take it over, a fulfillment of the Kremlin’s apparent designs on Yandex as, in effect, a national-security property. Yandex perhaps will sell Yandex News to a Kremlin-friendly Russian buyer: There are reportedly talks of a sale to the social network VKontakte. More ominous still, Russian officials might stage a trumped-up case on tax fraud or the like against the company, as they did against Khodorkovsky and Yukos years ago, and then insist on the forfeiture of Yandex’s assets to the state. 

On March 11, I heard from Yandex that Volozh, who’d been silent for 16 days, wanted to talk. A spokesperson arranged for a Zoom call with him that day. Twelve minutes before the call was supposed to begin, the spokesperson texted me that she’d have to postpone the meeting. “Something urgent has come up,” she said, without elaborating. There has been no word since.

I spoke with Strebulaev a few days after he resigned from the board, and I asked whether he thought it was all over for the company. “I don’t know,” he replied. But Volozh, two years shy of 60, could move on with a new venture, he said. “If Arkady decides to do something else, maybe in Israel,” Strebulaev told me, “I think he is going to be successful. People love him. People believe in him,” and “people will follow.” He reflected on his first meeting with Volozh, over a two-hour lunch in London in 2018, the conversation spilling over into Volozh’s avid interest in Israeli archaeology. Volozh is “always teeming with ideas,” Strebulaev said. “He kind of lives in the future.”

Volozh reportedly has a Maltese passport and an Israeli one; it’s now likely he will live the rest of his years outside of Russia. Still, his career and even his life might be framed as “the one who stayed behind.” He could have joined the brain exodus from the Soviet Union and post-Soviet Russia and tried to make his fortune in the West. Instead he made one in Russia, and he now stands to lose a big portion of it there. The duality he tried for so long to maintain, as both Russian and Western, has collapsed—always the risk in the implicit bargain he made with Putin’s Kremlin.

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