Adobe removes its representatives from Russia

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2014/09/26 • Russia

Article by: Darya Trosnikova

The company is reorienting itself towards the Cloud 

The Russian subsidiary of Adobe, Adobe Systems LTD, has issued a statement to the Federal Tax Service regarding the liquidation of the legal entity on September 16, 2014, the service’s website reports. On September 24 the company was taken off the taxation list. A source close to Adobe also told Vedomosti that the company was leaving Russia. The information was later confirmed by Adobe representative Matvey Kireyev.

Adobe is going through the process of completely removing its representatives from Russia, however the users will still be able to buy products and services from Adobe through the company’s website and resellers, Matveyev said. Adobe has been actively developing Creative Cloud and Marketing Cloud services for the past several years, having replaced the model of unlimited licensing for cloud subscription, he explains. The company is correcting its activities in Russia and focusing on selling their products through Russian partners and the company website, Matveyev noted. Matveyev was unable to say whether the implementation of cloud technologies had been reflected on the work of the company’s subsidiaries in other countries.

This week it was also reported that the Russian government plans to create a special fund to develop domestic OS; they want to make programmers give up to 10% of their income from OS license sales in Russia to the fund. Matveyev refused to say whether the liquidation of their office in Russia would allow them not to pay money to this future fund. According to a source in the ministry, so far not all details have been worked out, and there is no total clarity as to how and who will pay money to the new fund. However, the idea is to tax only electronic licenses on program products which are not subject to VAT in Russia.

Vedomosti’s informant also presumes that Adobe’s leaving Russia has to do not only with cloud technologies: because of the sanctions, the company failed several deals in Russia, besides, Adobe turned out to have been unready for the amendments to the personal data law, which prohibit the processing of Russians’ personal data outside of the country starting September 1, 2016. The company is now firing people: the first wave happened back in January, after it, only 12 people remained in the office, says he.

The personnel decrease in the Russian Adobe office was discovered back in February 2014, this had to do with the decrease in sales on developing markets: in 2012 the company closed an office in Taiwan, last year, people were fired in the UAE and Turkey, and then it was Russia’s turn, where the personnel of the subsidiary was decreased by half – by 10 people. A month later the company fired all the employees who were fighting piracy in Russia.

Translated by: Mariya Shcherbinina
Source: Vedomosti

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  • Jim

    The last sentence was interesting – I think that piracy is a huge problem in Russia. I know Russians can download almost anything for free, even brand new movies already dubbed in Russian before they appear in theaters in America. Adobe products are surely more pirated than purchased.