Google and 11 other Western companies have finally left the Russian market

Leroy Carter -

In a significant move that reflects the ongoing geopolitical shifts and the growing isolation of Russia from the global economy, Google and 11 other Western companies have completely withdrawn from the Russian market in October 2023. This exodus was documented in a monitoring report by the KSE Institute within the framework of the "Self-sanctions/LeaveRussia" project, which assesses the impact of foreign business withdrawal on the Russian economy.

By the end of October, the total number of international firms and corporations that have fully exited Russia reached 296, indicating a substantial corporate retreat from the country amid its continuing conflict with Ukraine and the resultant international sanctions.

The report by KSE Institute highlighted the departure of twelve international companies in the last month, which includes notable departures such as:

  1. Google (part of Alphabet) – The bankruptcy of its Russian subsidiary was acknowledged by a court.
  2. ASBIS – A significant player in information and communications technology.
  3. Carlsberg – The company is preparing for a legal battle over the rights for its Russian subsidiary to sell its brands after Russia took control over shares of Danone and Carlsberg’s subsidiary companies.
  4. Decathlon – A renowned sporting goods retailer.
  5. Ensto – An international family-owned company specializing in the development and manufacture of electrical systems and supplies.
  6. Viterra (part of Glencore) – Which stopped being a shareholder of "Rosneft" in 2022. Sberbank is trying to seize the remaining Russian assets of the company due to an oil debt.
  7. Ingka – One of the largest franchisees operating IKEA stores.
  8. Legrand – A global specialist in electrical and digital building infrastructures.
  9. Sulzer – A global leader in fluid engineering.
  10. VEON – A multinational telecommunication services company.
  11. Xerox – A corporation known for its printers and copiers.
  12. KONE – An international engineering and service company.

Furthermore, the status of one of Germany's largest industrial conglomerates, ThyssenKrupp, was reclassified from "exited" to "waiting," since its local companies have not changed owners but were renamed, presumably to conceal connections with the parent company.

As of November 1, 2023, 296 international companies have completely ceased operations in Russia, which represents 8.3% of the total entries in the KSE database, or 23.3% of companies that generated revenue in Russia in 2022.

Additionally, 1215 companies (34.1% of the total number) have scaled back operations and expressed intentions to leave the country.

However, 1503 companies (42.1% of the total monitored by KSE Institute) have not announced any plans to leave the Russian market and are operating without any changes.

Another 552 companies (15.5% of the total) have suspended new investments in Russia and continue to wait and see how the situation develops.

The departure of these companies from Russia is more than a mere economic shift; it is indicative of a larger realignment of international business practices in response to geopolitical conflicts and ethical considerations. The actions of these companies demonstrate a commitment to adhering to international sanctions and reflect a broader trend of de-globalization in certain aspects of international trade.

For companies like Google, the withdrawal is not just a business decision but also a stand against the actions that led to the sanctions, aligning their corporate policies with the international community's response to the invasion of Ukraine. The long-term implications of these departures will likely affect the Russian economy, technological development, and its integration with the global market.

As companies continue to navigate the complex web of sanctions and the moral quandaries posed by doing business in certain jurisdictions, the landscape of international commerce will continue to evolve. The KSE Institute’s monitoring offers a comprehensive overview of these shifts and serves as a critical barometer of economic and ethical stands in international business practices.

The exodus underscores the ongoing challenges Russia faces in maintaining its economic stability amidst increasing sanctions and isolation. The decisions of these corporations reflect the growing complexities and considerations multinational companies face in today's interconnected global economy, where corporate responsibility extends beyond profit and into the realm of international relations and ethical practices.

In conclusion, the departure of Google and 11 other significant Western companies marks a pivotal moment in Russia’s commercial relations with the West. As the global community watches the economic landscape reconfigure in real-time, the reverberations of these collective corporate exits will be felt beyond the immediate financial implications, shaping the future of international trade and geopolitical alliances.