- Nearly 1,000 Western companies are pulling back on business operations in Russia, the Wall Street Journal reports.
- Global companies have lost about $59 billion amid sanctions, hasty exits, and dwindling business.
- Previously-valued assets are becoming worthless, forcing companies to take write-downs.
- For more stories, go to www.BusinessInsider.co.za.
Since Russia invaded Ukraine at the end of February, global companies have lost $59 billion as they get squeezed by sanctions and cut business operations in the country, the Wall Street Journal reported Friday.
Nearly 1,000 Western businesses, per Yale researchers cited by the Journal, have committed to exiting completely from Russia or slashing some business there. Previously valuable assets are becoming worthless, the Journal noted, which means companies have to take write-downs as those assets decline in value. Those can cover retailers, restaurants, banks and more.
Fast-food giant McDonald's, for example, is expected to record an accounting charge of over $1.2 billion after selling its restaurants to a local licensee.
And aircraft company Aercap Holdings NV had to take an accounting charge of $2.7 billion in May after more than 100 of its planes got stuck in the country, the Journal reported.
In the same month, oil giant BP PLC saw a $25.5 billion accounting charge on its Russian holdings, and a $13.5 billion write-off of shares in Rosneft — even though it has yet to announce whether it will divest its Russian assets.
Meanwhile, IBM and Microsoft are set to lay off hundreds of employees in Russia as tech companies make their way out of the country.
"As a result of the changes to the economic outlook and the impact on our business in Russia, we have made the decision to significantly scale down our operations in Russia," a Microsoft spokesperson told Insider previously.
And more financial pain awaits for businesses with ties to Russia, too, with more sanctions, big sales, and shutdowns coming. Analysts expect more economic fallout to come as war rages on in Ukraine.
Still, Yale researchers maintained that markets are "rewarding companies for leaving Russia," as the share-price gains for companies exiting the country have beat out "the cost of one-time impairments for companies that have written down the value of their Russian assets."
Other big-name corporations exiting the warring nation include Goldman Sachs, Uniqlo, Ikea, and Spotify, among others.