What Global Companies Are Abandoning Russia and Why

From a story on axios.com by Hope King headlined “What global companies are abandoning Russia and why”:

Global businesses in every sector are abandoning Russia following the invasion of Ukraine.

Why it matters: In addition to condemning the invasion, the companies see an impossible environment — from worker safety to the logistics of getting supplies, financial and sales disruption and the complexity of complying with sanctions.

State of play: Financial sanctions have isolated Russia from the rest of the world. Businesses operating in Russia have an increasingly limited ability to collect revenue or pay workers and suppliers.

  • Economic sanctions, including export controls, have curtailed imports.
  • Some workers were being moved out of Russia.
  • Restricted airspace and travel are preventing companies from getting equipment they need to continue to operate.

Between the lines: Some companies that have very little physical presence in Russia — including many in tech, retail and media — are limiting how products are used in Russia or have pulled them.

Flashback: Since the Soviet Union’s collapse three decades ago, Russia had been seen as an emerging market with long-term growth potential.

Since the invasion began:

  • Deloitte said it “will no longer operate in Russia and Belarus,” and “will separate our practice” in the two countries “from the global network of member firms.”
  • Ernst & Young was severing ties with Russia, axing its 4,700-person business in the country.
  • PricewaterhouseCoopers was cutting ties with its Russian member, affecting 3,700 partners and staff in the country.
  • KPMG was ending its association with its 4,500 partners and staff in Russia and Belarus.
  • Estée Lauder said it was suspending “all commercial activity in Russia.
  • Boeing suspended major operations in Moscow, as well as maintenance and technical support for Russian airlines.
  • Airbus is halting supply of parts and services to Russian airlines.
  • Shell was severing ties with Russian gas giant Gazprom and ending its roughly $1 billion financing of the Nord Stream 2 gas pipeline. It’s donating profits from a recent purchase of Russian crude oil to aid Ukrainian refugees.
  • BP is exiting its nearly 20% stake in Russian oil giant Rosneft, and faces a potential financial hit of as much as $25 billion.
  • Exxon Mobil said it was exiting Russia oil and gas operations valued at more than $4 billion and cease new investment.
  • GM, which sells only about 3,000 cars a year in Russia,was suspendingexporting vehicles.
  • Ford suspended operations.
  • BMW stopped shipments and will stop production in Russia.
  • Daimler Truck Holdings said it would no longer send supply components to its Russian joint-venture partner.
  • Volvo Cars, owned by Chinese conglomerate Zhejiang Geely, halted sales and shipments.
  • Renault ceased operations and production at two assembly plants because it can’t get parts.
  • VW paused delivery of Audis already in Russia so it can adjust car pricesto reflect the decline in value of the ruble.
  • Harley-Davidson suspended shipments to Russia.
  • Adidas suspended its partnership with the Russian Football Union.
  • Nike ceased online sales because it can’t guarantee delivery.
  • FedEx and UPS suspended shipments.
  • Yoox Net-A-Porter Group and Farfetch, luxury e-commerce platforms, are suspending deliveries in Russia.
  • Apple has paused product sales and limited services (including Apple Pay), on top of ceasing exports to Russia and restricting features in Apple Maps in Ukraine to safeguard civilian safety.
  • Dell stopped selling products.
  • Ericsson was suspending deliveries to Russia.
  • Walt Disney was pausing film debuts in Russia. Warner Bros., Sony, Paramount and Universal say they won’t release films in the country.
  • Ikea was closing its Russian stores and pausing all exports and imports in the country and ally Belarus.
  • Airbnb said it was “suspending all operations in Russia and Belarus.”
  • Google suspended all online advertising in Russia.
  • Microsoft suspended all new sales of its products and services in Russia.
  • Hermès temporarily closed all of its stores in Russia.
  • Visa, MasterCard and American Express suspended all Russianoperations.
  • McDonald’s announced it is temporarily closing all of its stores in Russia.
  • Starbucks suspended all activity in Russia.
  • Amazon Web Services was no longer accepting new customers Russia and Belarus.
  • Coca-Cola was suspending operations in Russia.

 

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