Accenture and McKinsey join corporate stampede to exit Russia

Accenture axed its entire 2,300-person business in Russia on Thursday while McKinsey and Boston Consulting Group moved to suspend all client work there, as the world’s largest professional services groups join western companies’ flight from the country.

Days after Vladimir Putin’s invasion of Ukraine, McKinsey and BCG had said they would not work for Russian government entities but had stopped short of dropping other clients, including state-owned groups.

McKinsey said on Thursday it would immediately cease work for state-owned entities in the country and would suspend all client work there once its other projects ended. The firm has more than 400 consultants in Russia.

BCG, which also employs about 400 people in the country, said on Thursday it was suspending its work with Russian clients but would keep staff based there on. They would be offered the chance to relocate outside Russia or to work on internal projects or for non-Russian clients, said one person briefed on the matter.

“While honouring our contractual obligations, we have already started to wind down work where possible,” said chief executive Christoph Schweizer in a memo to staff. “We will not take on any new work.” 

Accenture went further, saying it was closing its business in Russia entirely and would be “providing support” to its 2,300 employees there. Staff in Russia had been put on their notice period and would receive “generous” severance payments, said a person briefed on the matter.

Global professional services firms are deeply enmeshed in the Russian economy, serving businesses headquartered in the country as well as local subsidiaries of multinational groups.

Their exits follow accountant Grant Thornton’s decision to cut ties with its 500-person Russian affiliate on Tuesday. 

The departures are a sign of Russia’s increasing political and economic isolation as Western governments continue to impose sanctions on Russian organisations and oligarchs while many international corporations rush to cut ties with the country.

The exodus of western multinationals from Russia accelerated on Thursday, with Volkswagen following other carmakers in suspending all local production, ArcelorMittal halting its steel operations there and Ikea “pausing” its retail operations in the country.

The effective exits of Accenture and BCG will put pressure on rival advisers to follow suit, including the Big Four accounting groups: Deloitte, EY, KPMG and PwC.

On Wednesday night, Deloitte became the first of the four to say it was reviewing its presence in Russia. A person briefed on the position at another Big Four firm said it could be ready to announce its exit within days. However, an insider at another firm said it could take them weeks or even months before it could sever its ties to its Russian member firm.

The Big Four, which are structured as global alliances of separate national firms, are grappling with the practicalities of decoupling from their Russian member firms. Some of the groups have encountered contractual and other legal problems that were delaying their ability to remove their Russian member firms from their global alliances, according to people briefed on the matter.

Firms were also concerned about managing the exits in a way that protected the safety of their staff in the country, the people said.