More than three decades after McDonald’s opened its first restaurant in Moscow in 1990 and served a staggering 30,000 customers, the fast food giant has decided that it will no longer do business in Russia. The company will begin the process of “de-Arching,” or removing all its brand elements, including its iconic golden arches, from its 800+ locations across the country. It expects to lose $1.2 to $1.4 billion as a result.
McDonald’s announced on Monday that it was exiting the Russian market because of the “humanitarian crisis caused by the war in Ukraine” and had begun to search for a local buyer for all of its restaurants in the country. The move from the iconic American company comes after it decided to close its restaurants—joining other multinational companies including Starbucks, Coca-Cola, and PepsiCo—in the country in early March after Russia invaded Ukraine.
In a press release, McDonald’s said that its decision to leave Russia was motivated by the war and the “the precipitating unpredictable operating environment.” The company added that continuing to operate in Russia was no longer consistent with its values.
McDonald’s president and CEO Chris Kempczinski said that the company was “exceptionally proud” of its 62,000 employees in the country and hundreds of suppliers. The loyalty of McDonald’s employees and partners in Russia had made the announcement “extremely difficult,” he maintained.
“However, we have a commitment to our global community and must remain steadfast in our values,” Kempczinski explained. “And our commitment to our values means that we can no longer keep the Arches shining there.”
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Although it closed its restaurants in Russia in March, McDonald’s had continued to pay its employees. McDonald’s restaurants in Ukraine also remained closed but employees continue to be paid. The company noted in its press release that its priorities included continuing to pay Russian employees until a transaction is finalized and ensuring that employees keep their jobs under a new buyer.