- McDonald’s Corporation (NYSE: MCD) announced it is going to be shutting down its operations in Russia. These are the details.
McDonald’s Corporation (NYSE: MCD) is exiting its business in Russia, which comes more than 3 decades after the company became the first American fast food restaurant to open in the Soviet Union.
In Russia, McDonald’s has 850 restaurants and employs 62,000 people. McDonald’s had cited the humanitarian crisis caused by Russia’s invasion of Ukraine. And the company said that holding on to its business in Russia is no longer tenable, nor is it consistent with the company’s values.
When the war first started, McDonald’s had decided to temporarily close down the stores in Russia while still paying employees. Now McDonald’s is seeking a buyer for the restaurants, which would hire the workers at the company and pay them until the sale closes.
McDonald’s CEO Chris Kempczinski said it was a difficult decision to leave, especially given the “dedication and loyalty to McDonald’s” from employees and Russian suppliers.
“However, we have a commitment to our global community and must remain steadfast in our values,” said Kempczinski in a statement. “And our commitment to our values means that we can no longer keep the arches shining there.”
McDonald’s will start removing the golden arches, the symbols, and signs with the company’s name at those locations. But McDonald’s will keep its trademarks in Russia.
McDonald’s had opened its first restaurant in Russia shortly after the fall of the Berlin Wall. This event symbolized the easing of Cold War tensions between the Soviet Union and the United States.
Upon leaving Russia, McDonald’s expects to record a charge against earnings of somewhere between $1.2 billion and $1.4 billion.
Plus McDonald’s closed the restaurants in Ukraine, but they are still paying the full salaries of the employees there.
