As firms rush out of Russia, what about the workers they’re leaving behind?
A number of companies say they will continue to pay their employees and keep up leases, but is it sustainable?
When the Soviet Union collapsed in 1991, companies rushed behind the Iron Curtain to plant their flag in Russian soil. Icons of capitalism, from Apple to McDonald’s to Adidas, went on to build profitable businesses in the ensuing years as consumers clamoured for a slice of Western lifestyle. In just a few short days, those long-standing ties have unravelled.
After Russian President Vladimir Putin ordered an invasion of Ukraine on February 24, a mass corporate exodus set in, starting with BP and quickly gathering pace as dozens of global brands followed. The chaotic unwinding has left companies wondering whether they’ll ever return, how they’ll pay for workers and assets left behind, and whether they might recoup the value of their abandoned businesses in a country that has almost overnight become the world’s most sanctioned nation.
The closure of the Golden Arches in Russia, announced on March 8, is emblematic of the country’s downfall in much the same way the fast-food chain’s entry decades earlier burnished the nation’s reputation as a place of promise. Hundreds of Muscovites lined up around the first McDonald’s when it opened on January 31 1990. Now images of Russians hoarding the last few Big Macs and selling Happy Meals at elevated prices populate social media feeds. Left unclear is the future of the 850 restaurants McDonald’s shuttered and the 62,000 local employees the company said it will continue to pay...