McDonald’s said Monday that it began the process of selling its Russian business, including 850 restaurants that employ 62,000 people, and has become the latest major western company to withdraw from Russia since its invasion of Ukraine in February.
The fast-food giant pointed out the humanitarian crisis caused by the war and said maintaining business in Russia was “no longer tolerable and inconsistent with McDonald’s values.”
The Chicago-based company has announced that it will temporarily close its Russian store in early March, but will continue to pay its employees. On Monday, it said it would have Russian buyers hire those workers and ask them to pay until the sale was over. No future buyers were identified.
CEO Chris Kempczinski said employees and hundreds of Russian suppliers “dedication and loyalty to McDonald’s” made it difficult to resign.
“But we have a commitment to the global community and we must continue to adhere to our values,” Kempchinsky said in a statement.
McDonald’s said it was trying to market the restaurant and would begin removing the golden arches and other symbols and signs bearing the company’s name. He said he would hold the trademark in Russia.
The first McDonald’s in Russia opened in the middle of Moscow more than 30 years ago, shortly after the fall of the Berlin Wall. It was a powerful symbol of relieving the tensions of the Cold War between the United States and the Soviet Union.
McDonald’s was the first American fast food restaurant to open in the collapsed Soviet Union in 1991. The face of western sanctions.
Companies from British energy giant Shell and BP to French car maker Renault have withdrawn from Russia and have hit profits in an attempt to sell their holdings in Russia. Other companies are at least partially staying and some are facing a blow.
McDonald’s said it expects to record claims for $ 1.2 billion to $ 1.4 billion in revenue as it leaves Russia.
The Ukrainian restaurant is closed, but the company said it continues to pay full salaries to Ukrainian employees.
McDonald’s has more than 39,000 locations in more than 100 countries. Most are owned by franchisees, and the company owns and operates only about 5 percent.
McDonald’s said its withdrawal from Russia would not change its expectations of adding a net 1,300 restaurants this year. This will contribute about 1.5% to company-wide sales growth.
Last month, McDonald’s reported revenue of $ 1.1 billion in the first quarter. This is down from more than $ 1.5 billion in the previous year. Revenue was about $ 5.7 billion.
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