Multinational companies continue to pay at least 188,000 employees based in Russia despite pledges to suspend or end activities in the country, raising fears of mass sackings or nationalization.
In what is being called the “Great Business Retreat,” more than 400 foreign companies are divesting or suspending operations in Russia in response to crippling Western sanctions over President Vladimir Putin’s ongoing invasion of Ukraine.
Moscow mayor Sergei Sobyanin has warned that “about 200,000 employees are at risk of losing their jobs.” An analysis by the Financial Times calculates that just seven multinationals are responsible for more than 144,000 Russian jobs. The losses and write-downs of leaving Russia could cost them some $13.5 billion.
Hundreds of thousands of Russians will feel the economic pain of losing their jobs. For example, McDonald’s alone owns 847 restaurants -- of its global total of over 38,000 -- and has 62,000 employees across the country. McDonald’s says the closure of its Russian restaurants would cost it about $50 million a month.
Oil and gas giant Shell announced on March 8 that it would stop buying Russian hydrocarbons and shut all its service stations in Russia, starting immediately. The world’s largest liquefied natural gas trader will write down up to $5 billion following its decision to exit Russia.
How Putin will react is unclear. The Russian state may step in and nationalize foreign companies’ property and assets, which would slow the bleeding but not stop it.