Starbucks Corp announced on Monday that it would leave the Russian market after almost 15 years, joining McDonald’s Corp as the last major Western company to do so.
The United States and its Western allies retaliated against Russia by imposing broad economic sanctions to economically isolate it and cut it off from the global banking system. Western corporations find it difficult to operate there due to the laws.
Starbucks operates 130 locations in Russia, run by its licensee Alshaya Group, and employs over 2,000 people.
Starbucks’ decision to close its Russian operations differs from several other international companies.
The Starbucks outlets are owned and operated the Kuwait-based Alshaya Group, which stated the decision to depart was a “Starbucks statement” and referred inquiries to the coffee company. It didn’t specify whether it planned to sell the stores or reopen them under a new name.
Last week, McDonald’s said that it would sell its restaurants in Russia to local licensee Alexander Govor. He will rebrand them under a new name while keeping the McDonald’s trademarks. And Renault would sell its majority ownership in Russia’s largest automaker with the opportunity to purchase it back.
Other Western corporations, such as Imperial Brands and Shell, are severing links with the Russian market by agreeing to sell or transfer their holdings in the nation to local managers.
Starbucks to pay 6 Months’ Wages
Following Moscow’s invasion of Ukraine in March, Starbucks closed its locations. It ceased all economic activities in Russia, including shipments of its products to the nation.
The business stated it would continue to assist its employees in Russia, including paying them for six months.
It said it would continue to pay roughly 2,000 employees in the nation for the next six months.
Starbucks did not share financial information on the exit. McDonald’s has previously stated that it will incur a non-cash charge of up to $1.4 billion.
In March, the business halted supplies to Russia. It stated it has “taken the choice to depart the market and no longer have a brand presence.”
It would not reveal financial details, but it would help its employees “transition to other opportunities outside Starbucks.”
Read More : Starbucks leaving Russian market after McDonald’s, shutting 130 stores
