The list of companies pulling out of Russia, closing stores, or putting a halt on their trade with the country because of its invasion of Ukraine continues to increase daily. In addition to government sanctions, big names such as IKEA, Nike, Disney, Sony, Warner Bros., Apple, Samsung, Microsoft, Ernst & Young, McDonald’s, Starbucks, and Coca-Cola have taken action.
As of March 11, more than 340 companies have withdrawn from Russia, according to data collected by Yale professor Jeffrey Sonnenfeld and his research team at the Yale Chief Executive Leadership Institute. The group notes that many companies haven’t cut ties with Russia, for varying reasons.
Among the companies that have paused their dealings, the motivation may be partly due to public opinion about the war. More than 75 percent of Americans have demanded that corporations cut business relationships with Russia to protest the invasion of Ukraine, according to a Morning Consult survey. The ruble has sunk deeply in value, losing 40 percent of its value against the dollar, and the Russian stock market has yet to reopen after being shuttered on Feb. 25.
Even as companies large and small seek ways to decry Russia’s actions, the long-term effect remains in action, according to Luke Fitzpatrick, a guest lecturer at the University of Sydney in cross-cultural management and the pre-MBA program.
“One thing is for sure,” Fitzpatrick told The Epoch Times. “The country has experienced a severe economic crisis.”
A bottle of Coca-Cola is pictured in front of St. Basil's Cathedral in Moscow on March 9, 2022. AFP via Getty Images
For some of these companies, the changes have significant repercussions, especially for energy companies, since Russia is a major global producer of gas and oil; for others, the effects will be less apparent. McDonald’s has about 850 locations in Russia, and most of them are owned by the company, while in the semiconductor industry, Russia accounts for less than 0.1 percent of global chip purchases.
JPMorgan estimates that Russia’s economy could shrink, dropping 20 percent from the first quarter to the second quarter, and falling around 3.5 percent during 2022.
“These sanctions will almost certainly hit their mark on the Russian economy, which now looks headed for a deep recession and the imposition of capital controls,” JPMorgan’s team said.
Smaller operations also are exiting, many for reasons ranging from social responsibility to personal ties.
“Being born in the former Soviet Union, and having many friends and family from Ukraine, I felt a strong personal connection to the conflict in Ukraine and wanted to do more,” said Marina Mirchevskaya, the founder of CreativelyBox, which offers boxes filled with supplies needed to have a paint party and create works of art. She is offering a special-edition paint box, and will be donating 15 percent of each sale from the line to the Save the Children Ukraine Crisis Relief Fund.
“My goal is for people to come together to offer compassion and show support for the Ukrainian people while creating something beautiful,” she said.
Lemon.io, a marketplace with staff in Ukraine that connects European freelance developers to startups, took its stand weeks before Russia began its full-scale invasion into Ukraine.
“Three founders promised to support all its staff and programmers, paid a two-month advance on salary, and started paying developers twice a month,” Elena Fabrykant, marketing manager at Lemon.io, told The Epoch Times. After taking the lead, the company watched other IT businesses do the same and look for ways to support Ukraine-based employees.
A view of a closed Starbucks coffee shop in Moscow on March 10, 2022. AFP via Getty Images
After the war officially broke out, Lemon.io took further action.
“All the revenue in February and March will go to the Ukrainian army,” Fabrykant said. The company also donated to the “Povernys Zhyvym” (Back and Alive) fund. This charity has been connected to the military in Ukraine since 2014 and provides auxiliary equipment for the military, specialized software, drones, training, and other supplies.
“Two company [Lemon.io] employees joined the armed forces—they will get their salaries as promised,” she said.
The company has international clients that indirectly support Ukraine by continuing to do business with Lemon.io, according to Fabrykant.
“While the military men protect our sky and land, the business executives do their best to protect their employees, work—and help the army,” she said.
“To support Ukrainian refugees and take a stand against Russia’s invasion, we decided to kick off a weeklong fundraiser,” Katie Lyon, co-founder of Allegiance Flag Supply, a company that sells American flags sewn by American seamstresses, told The Epoch Times. The company donated 10 percent of online sales from a week in March to Operation USA, an organization helping displaced Ukrainians.
“We believe that the American flag stands for the ideals of democracy, not only in the U.S. but wherever brave Americans have carried it,” Lyon said. “The people of Ukraine may be fighting under their own flag, but they’re fighting for the same ideals.”
More than 2 million people have fled the fighting in Ukraine and landed in neighboring countries, including Hungary, Moldova, Poland, Romania, and Slovakia.
Rachel Hartman
Business Reporter
Rachel Hartman is a freelance writer with a background in business and finance. Her work has appeared in national and international publications for more than 10 years. She resides in Miami and travels frequently.
