‘The company has carefully examined and evaluated the impact of the U.S. legal requirements and made this sad and difficult decision as business opportunities in the country are no longer viable,’ says the Moscow-based antivirus software company.

Russian cybersecurity giant Kaspersky confirmed Tuesday that it will be exiting the U.S. market and ceasing operations in America.

The news comes after the U.S. recently unveiled sanctions that will effectively ban the Moscow-based company from sales and distribution of Kaspersky antivirus software in America.

“The company has carefully examined and evaluated the impact of the U.S. legal requirements and made this sad and difficult decision as business opportunities in the country are no longer viable,” Kaspersky said.

Kaspersky confirmed the layoffs affect less than 50 employees in America.

“Starting from July 20, Kaspersky will gradually wind down its U.S. operations and eliminate U.S.-based positions,” Kaspersky said in a statement to CRN.

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Kaspersky reported total revenue of $721 million in 2023, down 4 percent year over year, according to a press release. Kaspersky said 240,000 companies leverage its software products, although it’s unclear how many are U.S.-based customers.

“The decision and process follows the final determination by the U.S. Department of Commerce, prohibiting the sales and distribution of Kaspersky products in the U.S.,” Kaspersky said regarding the matter.

Why Kaspersky Is Shutting Down U.S. Operations

Last month, the U.S. took steps to ban domestic sales and integration of products by Kaspersky, citing “undue and unacceptable risks to U.S. national security” and for the security and safety of American citizens.

U.S. regulators also said that Kaspersky will be banned from entering into new agreements with U.S.-based persons involving information and communications and technology services on July 20, 2024, according to an order signed by U.S. Secretary of Commerce Gina Raimondo.

“Russia has shown it has the capacity—and even more than that, the intent—to exploit Russian companies like Kaspersky to collect and weaponize the personal information of Americans,” said Raimondo in June.

The government said there would be hundreds of thousands of dollars in fines against Kaspersky if it violated the sanctions.

In addition, American regulators set a deadline of Sept. 29 for when Kaspersky would be barred from providing “any anti-virus signature updates and codebase updates” and operating the Kaspersky Security Network in the U.S. or on any American’s IT system.

U.S. Blocks Kaspersky Leaders From Making Transactions

The U.S. government also blocked members of Kaspersky’s leadership team from making transactions in America.

A total of 12 individuals associated with Kaspersky were designated to the Specially Designated Nationals (SDN) list by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The company itself did not receive any sanctions by OFAC nor did its CEO and founder Eugene Kaspersky.

At the time, Kaspersky told CRN in an email that the sanctions were “unjustified and baseless” and “based on the present geopolitical climate and theoretical concerns, rather than on a comprehensive evaluation of the integrity of [the] company’s products and operations.”

Kaspersky has denied engaging “in activities which threaten U.S. national security.”

“Neither Kaspersky nor its management team has any ties to any government, and we consider the allegations quoted by the OFAC as pure speculation,” the company said.

Kaspersky Remains ‘Committed To Serving Its Customers and Partners’

Kaspersky was founded in Moscow in 1997 and grew into a world leader in antivirus software.

All of Kaspersky’s overall sales come through indirect channel and alliance relationships, according to CRN’s 2024 Channel Chiefs.

Kaspersky said it would “continue investing in strategic markets and remain committed to serving its customers and partners and ensuring their protection.”