Watch CBS News

McDonald's closes in Russia, citing "needless human suffering" in Ukraine

Global sanctions impact daily life in Russia
Global sanctions impact daily life in Russia 01:49

Facing boycott calls and a plea from a large investor, McDonald's on Tuesday said it would temporarily shut its 850 restaurants in Russia due to the country's invasion of Ukraine.

"[O]ur values mean we cannot ignore the needless human suffering unfolding in Ukraine," McDonald's CEO Chris Kempczinski stated in an open letter to employees of the company that was shared with CBS MoneyWatch. The letter stopped short of condemning Russia for the attack.

The world's largest fast-food chain said it will continue paying its 62,000 employees in Russia as well as all its workers in Ukraine. Ronald McDonald House Charities, the company's philanthropic arm, is now operating in Poland on the border with Ukraine to offer medical care and humanitarian aid for refugees who have fled the fighting, McDonald's said. The group's Ukraine chapter is also distributing medical supplies and offering aid throughout Ukraine, according to the company.

More than 2 million people have fled Ukraine since Russia's invasion of the country, according to the United Nations. 

Ukraine's refugee crisis grows 03:01

While a slew of companies have shut down operations in Russia as the Ukraine crisis escalates, McDonald's continued with business as usual in the country it first entered in 1990, three months after the fall of the Berlin Wall.

As opposed to other major fast-food brands in Russia that are owned by franchisees, including Burger King, KFC and Pizza Hut, McDonald's owns 84% of its Russian locations. According to McDonald's investment page, Russia accounts for 9% of the company's annual revenues, or roughly $2 billion.

Investor pressure to withdraw

McDonald's decision follows a plea by the New York state pension fund, with an estimated $280 billion in assets under management as of the end of 2021. 

"Pausing or ending McDonald's business operations in Russia would address various investment risks associated with the Russian market and play an important role in condemning Russia's role in fundamentally undermining the international order that is vital to a strong and healthy global economy," state comptroller Thomas DiNapoli stated Friday in a letter to Kempczinski.

On Tuesday, the comptroller applauded the move by McDonald's and other companies to withdraw from Ukraine. 

"Companies doing business in Russia need to seriously consider whether it's worth the risk. As investors, we want assurances that our holdings are not in harm's way. I commend the companies that are taking the right steps and suspending their operations in Russia," DiNapoli said in a statement.

More than 200 U.S. and foreign companies have curtailed operations in Russia so far, according to a running tally by Jeffrey Sonnenfeld, a management professor at Yale University. He had listed McDonald's and Pepsi as among 32 companies that remain in Russia with significant exposure. 

The inaction spurred calls for boycotts on social media. 

"I'm not lovin' it. @McDonalds is continuing to do business as normal in Russia, which means the corporate and sales taxes it pays there DIRECTLY support Putin's illegal and murderous war in Ukraine," one person tweeted.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.