The three business consultancies are rethinking their business in Russia.
Dusseldorf Some of the world’s largest strategy consultancies are suspending their business in Russia. On Thursday, McKinsey, the Boston Consulting Group (BCG) and Accenture announced that they would significantly reduce or even completely suspend their activities in the country.
McKinsey boss Bob Sternfels said via LinkedIn: “As of today, we will no longer be looking after new customers in Russia.” After the current projects have been completed, all customer service in the country will be discontinued.
The message also comes in response to growing internal criticism of McKinsey’s involvement in Russia. On Sunday, Sternfels had announced via Linkedin that the Kremlin government would no longer be advised. However, he left open whether this also meant state or partially state-owned companies such as the energy companies Gazprom or Rosneft – which caused resentment in his own company.
McKinsey has been active in Russia for almost 30 years and serves 21 of the country’s 30 largest companies, according to the US business service Bloomberg. The consulting firm employs a total of around 700 people there. A spokeswoman told the Handelsblatt that the employees would be put on other projects in other markets after existing mandates expired. However, the consultants could continue to do their work from Russia.
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BCG, the number two in the industry, wants to handle it in a similar way. “We will not accept any new work,” said world boss Christoph Schweizer in a statement. A few days ago, the German manager had only said that the entire portfolio of work in Russia would be critically examined.
The Big Four are under pressure to act
BCG intends to keep its Moscow location. One feels obliged to the employees, writes Schweizer in an internal mail that is available to the Handelsblatt. “As BCG, we had to balance our desire for a bold stance – in line with our values - with our commitment to our 400 BCG employees in Moscow.” Similar to McKinsey, BCG is successively placing consultants on other projects outside of Russia, once their current activities expire.
Compared to that, Accenture’s exit is much tougher. According to the Financial Times, the employees are released until their notice period and are offered “generous” severance payments. Accenture employs 2,300 people in Russia.
>> More background: How western managers of Russian companies react to the Ukraine war
The invasion of Ukraine has led to a mass exodus of international companies from Russia. Accenture, BCG and McKinsey join a list of firms that have scaled back or suspended business over the past week.
However, large international consultancies and auditing companies in particular are deeply intertwined with the largest companies in their markets and live from their proximity to the most important economic players in a region. The withdrawal of the three industry heavyweights should therefore massively increase the pressure on other international consulting and auditing companies – including the four largest auditors EY, Deloitte, KPMG and PwC.
On Wednesday, Deloitte was the first of the “Big Four” to announce that it was reviewing its business in Russia and its local presence. More may follow.
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