Big consultancies move to cut ties with Russia after backlash

Several major consulting firms – including McKinsey & Company and Boston Consulting Group (BCG) – have announced they are suspending operations in Russia following intense backlash on social media and criticism from employees and alumni.

McKinsey and BCG initially said they would cease advising the Russian government but stopped short of axing their lucrative engagements with state-owned and partially state-owned entities in the country. 

McKinsey has operated in Russia for nearly three decades and advises 21 of the country’s 30 largest companies. The New York-headquartered firm has more than 700 employees in Russia.

That half-measure, which McKinsey’s CEO Bob Sternfels publicized in a LinkedIn post last Sunday, drew criticism from McKinsey staff and alumni. Alumni commenters labeled the announcement as “cowardice” and a “weak PR move.”

In a rare example of a McKinsey leader diverging from the official company line, Ukraine managing partner Oleksandr Kravchenko urged all companies to cut ties with any business in which the Russian government owns a stake.

Big consultancies move to cut ties with Russia after backlash

McKinsey and BCG course-corrected on Thursday. McKinsey said it would cease work for state-owned entities and would suspend all client work in Russia once its active projects ended, though it did not give a timeline. BCG said it would suspend its work with clients and offer its more than 400 employees in Russia a chance to relocate to other countries or work on internal projects for non-Russian clients.

That move follows Accenture’s decision on Wednesday to close its 2,300-person business in Russia.

Grant Thornton, a mid-market accounting and consulting network, said on Tuesday it was cutting ties with its 500-person Russian member firm.

The above moves will put pressure on other consulting firms to exit their work in Russia. Bain & Company, the remaining Big Three strategy firm, said it was “re-evaluating its work in Russia,” according to a social media post from CEO Manny Maceda.

Deloitte on Wednesday was the first of the Big Four accounting and consulting firms to say it was reviewing its work in Russia.

The Big Four firms are moving more cautiously than their management consulting counterparts. As global alliances of independent country firms, Deloitte, PwC, EY, and KPMG could face contractual or other legal problems in contrast to management consultancies, which tend to be operate as a single entity across their global footprint.

The pullback of professional services firms from Russia is part of larger corporate exodus precipitated by Russia’s illegal invasion of its neighbor Ukraine and the resultant global censure and tidal wave of sanctions. BP said it is exiting its stake in Rosneft, while Shell said it has ended its partnership with Gazprom. Ford, GM, and Volkswagen said they are suspending their operations in Russia, while Apple, Nike, and Canada Goose paused product sales in the country.

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