McDonald’s to sell its business in Russia
Mcdonald’s is selling its business in Russia after 30 years of operations, without naming a prospective Russian buyer.
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.”
Chris Kempczinski, McDonald’s president and chief executive officer, said, “We’re exceptionally proud of the 62,000 employees who work in our restaurants and 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,”.
He resumed “However, we commit 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.”
The company confirmed that it was a priority to “ensure the employees of McDonald’s Russia continue to be paid until the close of any transaction and that employees have future employment with any potential buyer.”
Although McDonald’s announced on March 8 that it had temporarily closed restaurants in Russia and paused operations there, it continued to pay total salaries to its employees there.
McDonald’s said in the news release that it would write off up to $1.4 billion from the withdrawal and “recognize foreign currency translation losses.”.
The company established its business in Russia in January 1990, with more than 30,000 customers served on opening day. At the time, it became a symbol of the gradual opening of the Soviet Union to the West.
It seems that the company decision was expected; blogger Natalia Konstantinova said, “It was expected. War is war, business is business, “resume “From a business point of view, I understand why they do it. None of the businessmen needed this war… they also got trapped.”.
Renault (French carmaker) also announced Monday that it was selling its share in Renault Russia and its stake in Russian automaker Avtovaz.
With 39,000 restaurants in over 100 countries, McDonald’s has since invested billions of dollars across its supply chain and restaurants in Russia.
Mr. Kempczinski explained, “This was not an easy decision, nor will it be simple to execute given the size of our business and the current challenges of operating in Russia,” resume “But the end state is clear.”