McDonald’s said Monday that it would sell its business in Russia, a little more than two months after it paused operations in the country due to its invasion of Ukraine.
“The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable, nor is it consistent with McDonald’s values,” the company said in a news release. Russian forces, directed by President Vladimir Putin, have been accused of an array of war crimes during their assault on Ukraine.
McDonald’s exit from Russia is a bitter end to an era. The company, among the most recognizable symbols of American capitalism, opened its first restaurant in Russia over 32 years ago as the communist Soviet regime was falling apart and Western businesses and ideas infiltrated the Iron Curtain. Hundreds of people lined up to get a chance to sample McDonald’s burgers and fries at the Pushkin Square location in Moscow.
Now, McDonald’s has more than 800 restaurants and 62,000 employees in Russia. The company said it is seeking a local buyer.
McDonald’s announcement Monday is a stark indication of how much the Western world has turned against Putin’s regime. At first, following Russia’s invasion of Ukraine, McDonald’s kept silent about the attack. Then, after public outcry and pressure, McDonald’s and major U.S. brands such as Starbucks and Coca-Cola paused their business in Russia.
McDonald’s said Monday that it would start the process of “de-Arching” restaurants in Russia, meaning it would remove its name, logos, menus and branding from those locations. It will retain its trademarks in Russia, however, the company added.
The company also said it would attempt to make sure its employees in the country would continue getting paid until a deal closes, and that it would attempt to help them hold on to their jobs under the new owners.
McDonald’s said its restaurants in Ukraine, which has been under attack by Moscow’s forces since late February, remain closed. The company said it is continuing to pay full salaries to its employees in that country, as well.
Russia and Ukraine had accounted for about 2% of McDonald’s systemwide sales, and approximately 9% of its revenue and 3% of its operating income.
McDonald’s said it expects to record a primarily non-cash charge of about $1.2 billion to $1.4 billion related to its decision to leave the Russian market. In March, the company said its temporary shutdown would cost it about $50 million a month, or 5 cents to 6 cents per share.