All eyes are on Russia as the West’s growing docket of financial penalties deal a harder-than-expected blow to the country’s economy, challenging a decades-long effort by President Vladimir Putin to make the system sanction-proof.
To add to the economic blowback, Corporate America and a growing number of multinational companies have joined in protest of Moscow’s military attack on Ukraine, moving to sever business dealings with Russia or take a stand in support for Ukrainian refugees.
Measures by the U.S. and Europe, including a move to block some Russian banks from the SWIFT payment network and sanctions on the Central Bank of Russia, have already sent the ruble cratering and kept the Moscow Stock Exchange closed on Monday. A sharper economic fallout is underway, with JPMorgan warning the country is poised to enter a recession.
The repercussions for Russia’s financial system, even in early stages and still widening, have already proved so consequential that Deutsche Bank strategist Jim Reid deemed recent events “a financial war.”
JPMorgan was the first bank on Wall Street to make a bet on the economic fallout for Russia that could ensue, estimating the country’s economy could contract 20% quarter over quarter, saar [seasonal adjusted annualized rate], in 2Q, and around 3.5% for the year.
“These sanctions will almost certainly hit their mark on the Russian economy which now looks headed for a deep recession and the imposition of capital controls,” JPMorgan’s team said.
Here are a host of big-name companies that have taken action so far:
Levi’s
Jeans maker Levi’s has stopped operations in Russia.
“In 2021, approximately 4% of the company’s total net revenues were derived from Eastern Europe, half of which was related to Russia. But any business considerations are clearly secondary to the human suffering experienced by so many,” Levi’s said in a statement.
IBM
The company said it has suspended all business in Russia and created and deployed a specialized map that connects Ukrainian IBM employees contractors fleeing the country with IBM colleagues in the immediate CEE region who can offer assistance, including lodging, transportation, food and supplies.
Vanguard
The financial institution has stopped purchases of Russian securities from its actively managed funds and is working to exit positions across its index funds – accounting for less than 0.01% of client assets.
Boeing
Boeing Co. (BA) has suspended purchasing titanium from Russia.
“Our inventory and diversity of titanium sources provide sufficient supply for airplane production, and we will continue to take the right steps to ensure long-term continuity,” the planemaker said.
The move follows measures last week including closure of its offices in Kyiv and temporarily halting operations at its Moscow training campus.
HP
HP CEO Enrique Lores announced in a LinkedIn post that the company has halted shipments to Russia and paused all Russian marketing and advertising activities.
EY
Consulting organization EY said it will no longer serve any Russian government clients, state-owned enterprises or sanctioned entities and individuals anywhere in the world. The company also commenced a restructuring of its Russian member firm to separate it from the global network.
Netflix
The streaming giant stopped its service in Russia, including all future projects and acquisitions in the country.
“Given the circumstances on the ground, we have decided to suspend our service in Russia,” a Netflix spokesperson said.
Paypal
The payments company said on March 5 that it shut down its services in Russia due to “the current circumstances.”
Mastercard, Visa
Mastercard and Visa announced on March 5 that they are suspending operations in Russia. Earlier in the week the companies blocked several financial institutions in Russia, without specifying the names of firms, from using their payment networks following the rollout of Western sanctions.
“We will continue to work with regulators in the days ahead to abide fully by our compliance obligations as they evolve,” Mastercard said in a statement.
Inditex
The Spanish fashion retailer and owner of Zara is closing its 502 shops and stopping online sales in Russia, Reuters reported.
Microsoft
The tech giant’s blog announced on March 4 that it is suspending new sales of its products and services in Russia.
“Our single most impactful area of work almost certainly is the protection of Ukraine’s cybersecurity. We continue to work proactively to help cybersecurity officials in Ukraine defend against Russian attacks, including most recently a cyberattack against a major Ukrainian broadcaster,” the blog said.
Electronic Arts
The video game maker has stopped sales of its games, content and virtual currency in Russia and Belarus, according to statement on on its website.
[Also read: How media giants are cutting off Russia as crisis evolves]
Julius Baer
The Swiss wealth manager said on March 4 that is has new business with wealthy Russians, Reuters reported.
Ikea
The home furnishing retailer announced on March 3 that it has temporarily paused Ikea operations in Russia and Belarus. “These decisions have a direct impact on 15,000 IKEA co-workers. The ambitions of the company groups are long term and we have secured employment and income stability for the immediate future and provide support to them and their families in the region,” said in a statement on its site.
Spotify
Spotify has indefinitely closed its office in Russia, the audio streaming service said Wednesday. “Our first priority over the past week has been the safety of our employees and to ensure that Spotify continues to serve as an important source of global and regional news at a time when access to information is more important than ever,” Spotify said in a statement on March 2, according to Reuters.
H&M Group
The Swedish retailer said Wednesday it is temporarily pausing sales in Russia. Its stores in the Ukraine have already been temporarily shuttered for safety reasons.
“H&M Group cares for all colleagues and joins all those around the world who are calling for peace. Clothes and other necessities are donated by the company. H&M Foundation has also made donations to Save the Children and to UNHCR,” the company said in a press statement.
Canada Goose
The luxury retailer is the latest company to respond to Russia’s invasion of Ukraine by suspending all wholesale and e-commerce sales to Russia.
On March 2, in a press release the retailer said: “We stand with all of those who are impacted by the violence. We are supporting humanitarian efforts, providing aid to assist with the refugee crisis, and taking further actions to help. We have taken a number of actions in response to the conflict. Through the Canada Goose Response Program, we are donating $100,000 CAD to the United Nations High Commissioner for Refugees (UNHCR) who are leading global humanitarian efforts in the region.”
Toyota Motor
The carmaker will suspend auto production in Russia from Friday as it struggles to source parts from overseas, according to Nikkei on March 2. The suspension will include the halting of exports to Russia, car sales will stop when inventories run out.
Honda
The Japanese automaker said on March 2 it has suspended exports of cars and motorcycles to Russia, A spokesperson told Reuters “difficulty in shipping vehicles and making payments was the reason for the suspension.”
American Express
The credit card company announced on March 1 that it is halting relationships with Russian bank partners. Yahoo Finance’s Brian Sozzi obtained the memo by American Express Chairman and CEO Stephen Squeri to employees detailing its plan to sever ties with Russia.
Source: Yahoo Finance
