McDonald’s said Monday that it will sell its business in Russia after more than 30 years in the country.
The company cited the war in Ukraine and the unpredictable operating environment in Russia as its reasons for leaving, saying in a news release that its “continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values.”
“We’re exceptionally proud of the 62,000 employees who work in our restaurants, along with the hundreds of Russian suppliers who support our business, and our local franchisees. Their dedication and loyalty to McDonald’s make today’s announcement extremely difficult,” Chris Kempczinski, McDonald’s president and chief executive officer, said in the press release. “However, we have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the Arches shining there.”
McDonald’s announced on March 8 that it had temporarily closed restaurants in Russia and paused operations there. Other Western brands like Starbucks and PepsiCo announced at the time that they would also suspend their operations.
McDonald’s restaurants in Ukraine are also closed although the company said it continues to pay full salaries for its employees there.
McDonald’s said in the news release that it will write off up to $1.4 billion from the withdrawal and “recognize foreign currency translation losses.”
The company first opened its doors in Russia in January 1990, the waning days of the Soviet Union, with more than 30,000 customers served on opening day, according to the company. At the time it became a symbol of the gradual opening of the Soviet Union to the West.
French carmaker Renault also announced Monday that it was selling its share in Renault Russia as well as its stake in Russian automaker Avtovaz.
Russia has reportedly been developing something of a replacement for McDonald’s, complete with similar branding.
This is a developing story. Please check back for updates.
Kurt Chirbas contributed.